Time value of money

1. If you invest Rs. 10,000 today for a period of 5 years, what will be the maturity value if the interest rate is? (a) 8 (b) 10 (!) 1" (d) 15 #ns$ (a) Rs. 14,693 (b) Rs. 16,105 (c) Rs. 17,623 (d) Rs. 20,113. ". %ow many years will it ta&e for Rs. 5,000 invested today at 1" to 'row to Rs. 1,(0,000? )se the rule of *". #ns$ +0 years +. #mount invested today , Rs. 1,000- maturity value , Rs. 8,000- time period , 1" years. )se rule of (. to !al!ulate the implied interest rate. #ns$ 18.. /. If you invest Rs. +,000 a year for + years and Rs. 5,000 a year for * years therefore at a rate of 1" , what will be the maturity value at the end of 10 years? #ns$ Rs. *",8"/ 5. 0unita e1pe!ts an e1penditure of Rs. ",00,000 after a period of 10 years. %ow mu!h should she save annually to have the re2uired sum after 10 years, if she invests her savin's at a rate of 1" . #ns$ Rs. 11,+.* (. #nnual payment , Rs. 1,500- maturity value , Rs. 1",500, period , 5 years. 3ind out the implied interest rate. #ns$ "5.*+ *. 4ou invest Rs. +,000 today and 'et Rs. 10,000 after ( years. 5hat is the implied interest rate? #ns$ ""."" rate of interest

8. 5hat will be the present value of Rs. 1",000 re!eivable after 10 years if the rate of dis!ount is (i) 10 (ii) 1" (iii) 15 #ns$ (i) Rs. 4,6325 (ii) Rs. 3,864 (iii) Rs. 2,964 .. 5hat is the present value of a 5 year annuity of Rs. +,000 at 1"
Ans: Rs. 10,815

10. 6r. 0rinivas is 'oin' to retire after ( months. %e has a !hoi!e between (a) an annual pension of Rs. 8,000 as lon' as he lives, and (b) # lump sum amount of Rs. #mount of Rs. 50,000. If he e1pe!ts to live for "0 years and the interest rate is 10 #ns$ Rs. 68,112 11. 0unil has deposited Rs. ",00,000 in a ban&, whi!h pays interest 78 . %ow mu!h !an he withdraw every year for a period of "5 years, so that there is no balan!e left at the end? #ns$ Rs. 18*+* 1". 4ou invest Rs. 1,500 at the end of year one, Rs. ",000 at the end of the se!ond year, and Rs. 5,000 ea!h year form the third year to the tenth. 8al!ulate the present value of the stream if the dis!ount rate is 10 .
Ans: Rs. 16,790

whi!h option would you su''est him to 'o for?

1+. 4ou re!eive Rs. 1,000 a year for the first 8 years, and Rs. /,000 a year forever therefore. 8al!ulate the present value if the dis!ount rate is 1" . #ns$ Rs. 18,435 . 15. # !ompany is offerin' to pay Rs. 10,000 annually for a period of 10 years if you deposit Rs. 50,000 now. 5hat is the implied interest rate? #ns$ 15.1