Assignment 2

Course Name: Principles of Finance

1) If you wish to accumulate Tk.140, 000 in 13 years, how much must you deposit at the
beginning of each year in an account that pays an annual interest rate of 14%?
2) If you wish to accumulate Tk.197, 000 in 5 years, how much must you deposit today in
an account that pays a quoted annual interest rate of 13% with semi-annual compounding
of interest?
3) You plan to borrow $389,000 now and repay it in 25 equal annual installments (payments
will be made at the end of each year). If the annual interest rate is 14%, how much will
your annual payments be?
4) You are told that if you invest Tk.11, 000 per year for 23 years (all payments made at the
end of each year) you will have accumulated Tk.366, 000 at the end of the period. What
annual rate of return is the investment offering?
5) You are valuing an investment that will pay you $12,000 the first year, Tk.14, 000 the
second year, Tk 17,000 the third year, Tk 19,000 the fourth year, Tk 23,000 the fifth year,
and Tk 29,000 the sixth year (all payments are at the end of each year). What it the value
of the investment to you now is the appropriate annual discount rate is 11.00%?
6) If a company deposits Tk. 5000 today at the rate of 12% interest compounded annually in
a fixed deposit account of a Bank. How many year it will take to become Tk. 160,000.
7) Nowshin Company is thinking of purchasing a machine. For that purpose she wants to
take loan from a commercial bank at 12% rate of interest. The cost of machine is Tk
300,000. If the loan is repaid by 5 equal installments at the beginning of the year, what
will be the amount of loan installment? Show the loan amortization schedule.