Khushi Aggarwal CAFM
CHAPTER – TIME VALUE OF MONEY
QUESTIONS FOR PRACTICE
1. Suppose a company expects to receive Rs.8,000 after 5 years. Calculate the present valu
current market interest rate is 12% and the interest is compounded annually.
(PV=Rs.4,540)
2. What is the present value of an offer of Rs.14,000 two years from now if the opportunity
(discount rate) is 17% per year discounted annually?
(Rs.10,227.19)
3. How much would you have to deposit today to have Rs.10,000 in five years at 6% interes
quarterly?
(Rs.7,424.46)
4. What is the present value of an offer of Rs.15,000 one year from now if the opportunity
(discount rate) is 12% per year nominal annual rate compounded monthly?
(Rs.13,311.74)
5. You are scheduled to receive Rs.13,000 in two years. When you receive it, you will inves
at 8 percent per year. How much will you have in eight years?
(Rs.20,629.37)
6. You have borrowed Rs.10,000 from a bank with the understanding that you will pay it of
Rs.12,000 after 2 years. Find the annual rate of interest on this loan.
(9.545%)
7. You have borrowed Rs.850 from your sister and you have promised to pay her Rs.1000 a
annual compounding, find the implied rate of interest for this loan.
(5.57%)
8. Suppose Arjun invest Rs.2000 per year in a stock index fund, which earns 9% per year, fo
what would be the closest value of the accumulated value of the investment upon paym
instalment?
( 30,385.8594)
CHAPTER – TIME VALUE OF MONEY
QUESTIONS FOR PRACTICE
1. Suppose a company expects to receive Rs.8,000 after 5 years. Calculate the present valu
current market interest rate is 12% and the interest is compounded annually.
(PV=Rs.4,540)
2. What is the present value of an offer of Rs.14,000 two years from now if the opportunity
(discount rate) is 17% per year discounted annually?
(Rs.10,227.19)
3. How much would you have to deposit today to have Rs.10,000 in five years at 6% interes
quarterly?
(Rs.7,424.46)
4. What is the present value of an offer of Rs.15,000 one year from now if the opportunity
(discount rate) is 12% per year nominal annual rate compounded monthly?
(Rs.13,311.74)
5. You are scheduled to receive Rs.13,000 in two years. When you receive it, you will inves
at 8 percent per year. How much will you have in eight years?
(Rs.20,629.37)
6. You have borrowed Rs.10,000 from a bank with the understanding that you will pay it of
Rs.12,000 after 2 years. Find the annual rate of interest on this loan.
(9.545%)
7. You have borrowed Rs.850 from your sister and you have promised to pay her Rs.1000 a
annual compounding, find the implied rate of interest for this loan.
(5.57%)
8. Suppose Arjun invest Rs.2000 per year in a stock index fund, which earns 9% per year, fo
what would be the closest value of the accumulated value of the investment upon paym
instalment?
( 30,385.8594)
