Q.1 PV 12000 a) FV ### Annual Compounding Q.

7
i 9% b) FV ### Quarterly Compounding
n 7 c) EAR 9.31 Alternative b) is better
Q.2 FV 45,000 PV ### Q.8
i 18% Qrtly
n 6
Q.3 A 750 a) PV ### Monthly compounding Q.9
i 18% b) Total ###
n 8
Q.4 YR CF PVF PV i 12% Q.10
1 12,500 0.8929 11,160.71
2 10,000 0.7972 7,971.94
3 7,500 0.7118 5,338.35
4 5,000 0.6355 3,177.59
5 2,500 0.5674 1,418.57
6 - 0.5066 -
7 12,500 0.4523 5,654.37
###
Q.5 Fva 50,000 Annuity 3,137.27
i 10%
n 10
Q.6 FV 7,500 n 10.15
PV 5,000
i 4% Month
PV 3500 FV ###
i 0.05
n 12
PV 10000 a) i 0.12
FV 12625 b) FV ###
n 2
A 4000 FV ### ORDINARY
i 0.1 FV ### DUE
n 4
A 300 FV ###
i 0.14 19.3373 5,801.19
n 10 2.1950 658.49
Missing 4th 5,142.70
ALTERNATE METHOD
9 300 3 976
8 300 3 856
7 300 3 751
6 0 2 -
5 300 2 578
4 300 2 507
3 300 1 444
2 300 1 390
1 300 1 342
0 300 1 300
5,143
Q.11
a) FV = PV (FVF i, n) b) FV = PV (FVF i/m, n x m)
FV = 1,000 (FVF 8%, 3) FV = 1,000 (FVF 2%, 12)
FV = 1,000 (1.2597) FV = 1,000 (1.2682)
FV = 1,259.75 FV = 1,268.24

c) FVA = A (FVFA i, n) d) FVA = A (FVFA i, n)

FVA = 250 (FVFA 8%, 4) 1,259.75 = A (FVFA 8%, 4)
FVA = 250 (4.5061) 1,259.75 = A (4.5061)
FVA = 1,126.53 A = 1,259.75 / 4.5061
A = 279.57

Q.12
a) PV = FV (PVF i, n) b) FVA = A (FVFA i, n)
PV = 1,000 (PVF 8%, 3) 1,000 = A (FVFA 8%, 4)
PV = 1,000 (0.7938) 1,000 = A (4.5061)
PV = 793.80 A = 1,000 / 4.5061
A = 221.92

c) FV = PV (FVF i, n) d) FV = PV (FVF i, n)
FV = 750 (FVF 8%, 3) 1,000 = 750 (FVF i, 3)
FV = 750 (1.2597) 1,000 / 750 = FVF i, 3
FV = 944.78 i (n=3) = 10% (as per table)
Since FV of A=221.92 > FV of 750,
we accept A=221.92

e) FV = PV (FVF i, n) f) Effective annual rate

FV = 400 (FVF 4%, 6) EAA = (1 + i/m)m - 1
FV = 400 (1.2653) EAA = (1 + 0.08/2)2 1
FV = 506.12 EAA = 8.16%
Target 1,000.00
FV of 400 506.12
Bal. required 493.88
FVA = A (FVFA i, n)
493.88 = A (FVFA 4%, 6)
493.88 = A (6.6330)
A = 493.88 / 6.6330
A = 74.46
Q.13 YR CF 'A' PVF PV CF 'B' PVF PV
a) 1 1,000 0.9091 909.09 5,000 0.9091 4,545.45
2 4,000 0.8264 3,305.79 5,000 0.8264 4,132.23
3 4,000 0.7513 3,005.26 5,000 0.7513 3,756.57
4 4,000 0.6830 2,732.05 5,000 0.6830 3,415.07
5 3,000 0.6209 1,862.76 5,000 0.6209 3,104.61
PRESENT VALUE 11,814.95 PRESENT VALUE 18,953.93
i 10%
b) 16,000 25,000

Q.14 A 100,000 PV ###

i 10%
n 10

Q.15 EAR (UNIVERSAL) 9% PREFER UNIVERSAL BANK

EAR (REGIONAL) 8.24%

Q.16 LOAN (PV) 25,000 i 10% n 5

A (Ordinary) 6,594.94
YR BEG INSTAL 10%INT PRINCPL CLOSING
1 25,000.00 6,594.94 2,500.00 4,094.94 20,905.06
2 20,905.06 6,594.94 2,090.51 4,504.43 16,400.63
3 16,400.63 6,594.94 1,640.06 4,954.87 11,445.76
4 11,445.76 6,594.94 1,144.58 5,450.36 5,995.40
5 5,995.40 6,594.94 599.54 5,995.40 0.00
YOU CAN CHANGE ANY "PERIOD" OR "RATE"' FOR REQUIREMENT
FUTURE VALUE FACTOR SINGLE SUM
YR 8% 9% 10% 11% 12% 13% 14% 15% 16% 17%
1 1.0800 1.0900 1.1000 1.1100 1.1200 1.1300 1.1400 1.1500 1.1600 1.1700
2 1.1664 1.1881 1.2100 1.2321 1.2544 1.2769 1.2996 1.3225 1.3456 1.3689
3 1.2597 1.2950 1.3310 1.3676 1.4049 1.4429 1.4815 1.5209 1.5609 1.6016
4 1.3605 1.4116 1.4641 1.5181 1.5735 1.6305 1.6890 1.7490 1.8106 1.8739
5 1.4693 1.5386 1.6105 1.6851 1.7623 1.8424 1.9254 2.0114 2.1003 2.1924
6 1.5869 1.6771 1.7716 1.8704 1.9738 2.0820 2.1950 2.3131 2.4364 2.5652
7 1.7138 1.8280 1.9487 2.0762 2.2107 2.3526 2.5023 2.6600 2.8262 3.0012
8 1.8509 1.9926 2.1436 2.3045 2.4760 2.6584 2.8526 3.0590 3.2784 3.5115
9 1.9990 2.1719 2.3579 2.5580 2.7731 3.0040 3.2519 3.5179 3.8030 4.1084
10 2.1589 2.3674 2.5937 2.8394 3.1058 3.3946 3.7072 4.0456 4.4114 4.8068

PRESENT VALUE FACTOR SINGLE SUM

YR 8% 9% 10% 11% 12% 13% 14% 15% 16% 17%
1 0.9259 0.9174 0.9091 0.9009 0.8929 0.8850 0.8772 0.8696 0.8621 0.8547
2 0.8573 0.8417 0.8264 0.8116 0.7972 0.7831 0.7695 0.7561 0.7432 0.7305
3 0.7938 0.7722 0.7513 0.7312 0.7118 0.6931 0.6750 0.6575 0.6407 0.6244
4 0.7350 0.7084 0.6830 0.6587 0.6355 0.6133 0.5921 0.5718 0.5523 0.5337
5 0.6806 0.6499 0.6209 0.5935 0.5674 0.5428 0.5194 0.4972 0.4761 0.4561
6 0.6302 0.5963 0.5645 0.5346 0.5066 0.4803 0.4556 0.4323 0.4104 0.3898
7 0.5835 0.5470 0.5132 0.4817 0.4523 0.4251 0.3996 0.3759 0.3538 0.3332
8 0.5403 0.5019 0.4665 0.4339 0.4039 0.3762 0.3506 0.3269 0.3050 0.2848
9 0.5002 0.4604 0.4241 0.3909 0.3606 0.3329 0.3075 0.2843 0.2630 0.2434
10 0.4632 0.4224 0.3855 0.3522 0.3220 0.2946 0.2697 0.2472 0.2267 0.2080

FUTURE VALUE OF ORDINARY ANNUITY

YR 8% 9% 10% 11% 12% 13% 14% 15% 16% 17%
1 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000
2 2.0800 2.0900 2.1000 2.1100 2.1200 2.1300 2.1400 2.1500 2.1600 2.1700
3 3.2464 3.2781 3.3100 3.3421 3.3744 3.4069 3.4396 3.4725 3.5056 3.5389
4 4.5061 4.5731 4.6410 4.7097 4.7793 4.8498 4.9211 4.9934 5.0665 5.1405
5 5.8666 5.9847 6.1051 6.2278 6.3528 6.4803 6.6101 6.7424 6.8771 7.0144
6 7.3359 7.5233 7.7156 7.9129 8.1152 8.3227 8.5355 8.7537 8.9775 9.2068
7 8.9228 9.2004 9.4872 9.7833 10.0890 10.4047 10.7305 11.0668 11.4139 11.7720
8 10.6366 11.0285 11.4359 11.8594 12.2997 12.7573 13.2328 13.7268 14.2401 14.7733
9 12.4876 13.0210 13.5795 14.1640 14.7757 15.4157 16.0853 16.7858 17.5185 18.2847
10 14.4866 15.1929 15.9374 16.7220 17.5487 18.4197 19.3373 20.3037 21.3215 22.3931

PRESENT VALUE OF ORDINARY ANNUITY

YR 8% 9% 10% 11% 12% 13% 14% 15% 16% 17%
1 0.9259 0.9174 0.9091 0.9009 0.8929 0.8850 0.8772 0.8696 0.8621 0.8547
2 1.7833 1.7591 1.7355 1.7125 1.6901 1.6681 1.6467 1.6257 1.6052 1.5852
3 2.5771 2.5313 2.4869 2.4437 2.4018 2.3612 2.3216 2.2832 2.2459 2.2096
4 3.3121 3.2397 3.1699 3.1024 3.0373 2.9745 2.9137 2.8550 2.7982 2.7432
5 3.9927 3.8897 3.7908 3.6959 3.6048 3.5172 3.4331 3.3522 3.2743 3.1993
6 4.6229 4.4859 4.3553 4.2305 4.1114 3.9975 3.8887 3.7845 3.6847 3.5892
7 5.2064 5.0330 4.8684 4.7122 4.5638 4.4226 4.2883 4.1604 4.0386 3.9224
8 5.7466 5.5348 5.3349 5.1461 4.9676 4.7988 4.6389 4.4873 4.3436 4.2072
9 6.2469 5.9952 5.7590 5.5370 5.3282 5.1317 4.9464 4.7716 4.6065 4.4506
10 6.7101 6.4177 6.1446 5.8892 5.6502 5.4262 5.2161 5.0188 4.8332 4.6586
 18% 19% 20%
1.1800 1.1900 1.2000
1.3924 1.4161 1.4400
1.6430 1.6852 1.7280
1.9388 2.0053 2.0736
2.2878 2.3864 2.4883
2.6996 2.8398 2.9860
3.1855 3.3793 3.5832
3.7589 4.0214 4.2998
4.4355 4.7854 5.1598
5.2338 5.6947 6.1917

18% 19% 20%

0.8475 0.8403 0.8333
0.7182 0.7062 0.6944
0.6086 0.5934 0.5787
0.5158 0.4987 0.4823
0.4371 0.4190 0.4019
0.3704 0.3521 0.3349
0.3139 0.2959 0.2791
0.2660 0.2487 0.2326
0.2255 0.2090 0.1938
0.1911 0.1756 0.1615

18% 19% 20%

1.0000 1.0000 1.0000
2.1800 2.1900 2.2000
3.5724 3.6061 3.6400
5.2154 5.2913 5.3680
7.1542 7.2966 7.4416
9.4420 9.6830 9.9299
12.1415 12.5227 12.9159
15.3270 15.9020 16.4991
19.0859 19.9234 20.7989
23.5213 24.7089 25.9587

18% 19% 20%

0.8475 0.8403 0.8333
1.5656 1.5465 1.5278
2.1743 2.1399 2.1065
2.6901 2.6386 2.5887
3.1272 3.0576 2.9906
3.4976 3.4098 3.3255
3.8115 3.7057 3.6046
4.0776 3.9544 3.8372
4.3030 4.1633 4.0310
4.4941 4.3389 4.1925