Ans 1 Future Value of Annuity Problem

Annuity Required is 56, 984

k 0.12 ($56,984.16)
n 10
FVAn 1000000
A ?

Ans 2 Present value of annuity to be compared with present lumpsum value.

k 0.15 ($58,473.70)
n 15
A 10000
PVA ?
Option A is prefereed as Rs. 58473 is > Rs. 50000 lumpsum

Ans. 3 Present Value of Annuity

k 0.09
n 20
A 100000
PVA ? ($912,854.57)

Ans 912855
Ans 4 Present value of Annuity problem
k 0.09 ($547,732.38)
n 20
A ? 547732
PVA 5000000

Ans 5
Corpus at the end of 60 years required. Present value of annuity problem to begin at the end of 61 years.
k 0.1
n 20
A 100000
PVA ? ($851,356.37)

To build corpus of Rs. 851356 at the end of 60 years he needs to invest

k 0.1
n 20 He needs to invest Rs. 14864 eery year from 41 to 60
A ? ($14,864.36)
FVA 851356
To build corpus of Rs. 851356 + 743218at the end of 60 years he needs to invest
k 0.1
n 20
A ? ($27,840.66)
FVA 1594574
mpsum value.

blem to begin at the end of 61 years.

If he wants to leave Rs. 5000000 for his children he needs additional amount equivaluent of present value of Rs. 5000000 at th

ds to invest
 Ans 6
k
g
A
Present value of growting perpetunity

Ans 7
grwoth in cashflow = Growth In price * growth in volume
A0 (just completed year)
A
n
Present value of growing annuity

Ans 8
PV
A
k
n
Present value of annuity…. Solve for K
ANSWER

Ans 9
A
Year Beginning of the year Principle
1 500,000.00
2 398,397.61
3 282,570.89
4 150,528.42
 12%
-3.00%
200,000,000.00
1,333,333,333.33

-1.20% k 0.15
7000000
6916000
20
Formula 7 40,642,452

10000
3800
? He says 13%
4

19.14%

k 0.14 n 4 PV 500000
($171,602.39)
End of the Year principle Annual installment P I
398,397.61 171,602.39 101,602.39 70,000.00
282,570.89 171,602.39 115,826.72 55,775.67
150,528.42 171,602.39 132,042.47 39,559.92
0.01 171,602.39 150,528.41 21,073.98