Time Value Money Example

Topics: Compound interest, Time value of money, Time Pages: 1 (276 words) Published: August 25, 2013
TVM Numericals for practice
1.Calculate the FV of a sum of rs 1000/-invested for 3 years. The rate of interest is 10%. ( Ans 1331/- SNM ) 2.Calculate the FV ( compounded value ), if rs 1000/- is compounded @ 10% p.a semi-annually for 3 years. ( Ans 1340/-,SNM ) 3.Mr investor invests rs 500/- , rs 1000/- and rs 2000/- at the end of each year . Calculate the compound value at the end of 3 years compounded annually when interest is charged at 10% p.a. ( ansrs 3705 /-,SNM ) 4.Find the compounded value of annuity when three equal yearly payments of rs 2000/- are deposited into an account that yields 7% . (ans 6430,SNM ) 5.Given the interest ( discounting rate ) as 10% you are required to find out the present value of future cash inflows that will be received over next 4 years . Yearcash flows ( rs )

11,000
22,000
33,000
44,000 ( ans 7546,SNM )
6.Calculate the PV of annuity of rs 500/- received annually for 4 years, when discounting factor is 10%. (ans 1585,SNM ) 7.Find the PV of annuity of rs 3000/- over three years when discounted @ 10 %. ( ans 7461, SNM ) 8.If the rate of interest is 16% and compounding is done quarterly , the effective rate of interest will be ? ( 16.98 %, CFAWB 20 /131 ) 9.If the interest rate is 1.5 % per month the effective annual rate of interest is ? ( 19.56% CFAWB/19 /126) 10.According to the rule of 69 , doubling period of an investment at an interest of 16% is ? ( ans 4.7 years CFAWB /19 /127 )
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