KINGDOM OF SAUDI ARABIA Academic year:1441-1442H

MINISTRY OF HIGHER EDUCATION Level : four

Al- Imam Muhammad Ibn Saud Islamic University Course: Principles of finance
and investment - FIN102
College of Economics and Administrative Sciences

Department of finance and investment

‫ وليد القحطاني‬:‫االسم‬
:‫الشعبة‬
440015117 :‫الرقم الجامعي‬
Question 1:
Hala Co. has borrowed an intermediate-term loan of
( 5117 ) at an interest annual rate of 10% for 4 years. The
annuities will be paid at the end of each year starting from the
first year.
Note:The loan will be repaid with 4 equal installments including
interest and pay down of the principle)
Answer:

)‫ (بإستخدام قانون القيمة الحالية للسنوية العادية‬0V ‫ القيمة الحالية(أو االسمية) للقرض‬:‫ أصل القرض‬-

R Repayment : ‫ الدفعة الدورية‬-

,n PVIFAi‫ معامل الفائدة للقيمة الحالية السنوية‬-

R=(5117 × 0.10) / 1 - (1 + 0.10)-4

=1614.26 SAR

R = P+I : R ‫قيمة دفعة التسديد‬

 I : ‫الفائدة السنوية‬

P : ‫دفعة أصل القرض‬

End Annuity Interest Principle Remaining

year (10%)= I payment=P Balance
0 5117
1 1614.26 511.70 1102.56 4014.44
2 1614.26 401.44 1212.82 2801.16
3 1614.26 280.12 1334.14 1467.52
4 1614.26 146.76 1467.52 00.0

Question 2:
The company “Arab Equipment leasing” want to buy equipment for ( 5117 ) riyals,
and then to lease to other companies. The estimated economic life of the equipment is
7 years, and can to be sold at the end of the period for X/1000 riyals (salvage Value).
The company follows the policy of straight-line depreciation expense and require a
return on investment after tax of 25%. The company pays income tax at a rate of 15%.
The company is committed to providing maintenance services for all equipment leased.
Maintenance cost is estimated 1500 SAR per year.

Note: CI is the last 4 numbers of your student ID ( 5117)

1- Find the sum of the discount factars S?
2- Find the depreciation D =?
3- Find the discounted salvage value DSV=?
4- Calculate the lease payment from the viewpoint of the Lessor. L = ?

Answer
1-

= 1 -(1 + 0.15)-7/ 0.15

S = 4.163

2-

= ( 5117 - 1000 ) / 7

D = 588.142

3-

= 1000 / ( 1+ 0.15 )7

DSV = 375.937
4-

CI  M  1     S    D  S  DSV
L
 1     S  1  R 
L = 5117 + 1500 × (1 - 0.25) × 4.163 - 0.25 × 588.142 × 4.163 - 375.397
(1 - 0.25) × 4.163 × (1 + 0.15)

L = 2258.0816