1. Your firm borrows Rs.

15,000,000 at an interest rate of 12% per

year and the loan is to be repaid in 5 equal installments payable at
the end of each of the next 5 years. What is the annual installment
payable? (Rs 4,160,888)
2. If the interest rate is 13 percent, what is the doubling period as per
the rule of 69? (5.66 years)
3. Suppose you deposit Rs.200,000 with an investment company
which pays 12 percent interest with compounding done once in
every two months, how much will this deposit grow to in 10 years?
(Rs 656200)
4. You can save Rs.5,000 a year for 3 years, and Rs.7,000 a year for 7
years thereafter. What will these savings cumulate to at the end of
10 years, if the rate of interest is 8 percent? (Rs 90281)
5. You plan to go abroad for higher studies after working for the next
five years and understand that an amount of Rs.2,000,000 will be
needed for this purpose at that time. You have decided to
accumulate this amount by investing a fixed amount at the end of
each year in a safe scheme offering a rate of interest at 10 percent.
What amount should you invest every year to achieve the target
amount? (Rs. 327,600)
6. At the time of his retirement, Rahul is given a choice between two
alternatives: (a) an annual pension of Rs120,000 as long as he
lives, and (b) a lump sum amount of Rs.1,000,000. If Rahul
expects to live for 20 years and the interest rate is expected to be
10 percent throughout , which option appears more attractive.
(Rs.1, 021,680 Rahul will be better off with the annual pension
amount of Rs.120,000)

7. A leading bank has chosen you as the winner of its quiz

competition and asked you to choose from one of the following
alternatives for the prize: (a) Rs. 60,000 in cash immediately or (b)
an annual payment of Rs. 10,000 for the next 10 years. If the
interest rate you can look forward to for a safe investment is 9
percent, which option would you choose? (Rs.64, 180 The annual
payment option would be the better alternative)
8. Ravikiran deposits Rs.500,000 in a bank now. The interest rate is 9
percent and compounding is done quarterly. What will the deposit
grow to after 5 years? (Rs.780,250)
9. What is the present value of Rs.120, 000 receivable annually for 20
years if the first receipt occurs after 8 years and the discount rate is
12 percent.
(Rs 405,119)
10.
Mr. Ganapathi will retire from service in five years .How
much should he deposit now to earn an annual income of
Rs.240,000 forever starting from the end of 6 years from now ?
The deposit earns 12 percent per year.
(Rs 1,134,000)