# Finance Problems 2

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5.1 xx $10,000

xxxxxxxxx 10%

Time x years=

**P** x principal amount xxxx initial amount you borrow or xxxxxxxx

**x** = xxxxxx rate xx xxxxxxxx xxx x xxxxxxxx

**x** = xxxxxx of xxxxx the xxxxxx is deposited or xxxxxxxx xxxx

**A** = xxxxxx xx money accumulated after x years, including interest.

**n** x xxxxxx xx xxxxx xxx interest xx xxxxxxxxxx xxx xxxx* *

A= xxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxx

xxxx x xxxxxxxxxxxxxxxxxxxxxxxxxxx

P= xxxxxxxxxx xxxxx

5.3)

xxxxxxxxx = xxxxxxxxxxxxxxx

1,000,000/250,000 =(1+r)^18

4= xxxxxxxx

Taking 18 root on both sides

1.08 x xxx

xxxx

xxx x Present value xxxx x

x£ 1000 x xxxx x xxxxxxxxxx

(1 x 0.065)n x xxxxxxxxx

xxxxxxxxx x xxxxxx xxx

Trying at x x 11

We xxxx

If x x xxx xxx xxxx hand side xx xxxxx xxxxxxxx (i) xx approximately xxxxx xx 2. Hence the xxxxxxxx xxx of xxxxx xx xxxxxx the sum xx money is 11 xxxxxx

5.5

Here, Present xxxxx xxxx x £ xxxxxxxxx

Payment (PMT) x £ xxxxx

Annual return (i) x 12%

xxxxxxx value (FV) x £ xxxxxxx

Number of years xx xxxxx xxxx xxx x ?

xxxxxxxxxx 2 ,50,000 42,180.53 12% 5000 5000 5000

We have,

£ 42,180.53 xx x 0.12)n + £ xxxxx x £ 250,000

xxxxxxxxxxxxx (1.12)n + £ 5,000 xxxxxxx x £ xxxxx = £ 30,000

or, 10,061.66 (1.12)n x £ xxxxxx

or, (1.12)n = £ 35,000/£ xxxxxxxxx

xxxxxxxxxxxx = 3.4786 ... (i)

In xxxxx eqn. (i) if xx go xxx xxxxxx xxxxxxx values of 'n', xxx left xxxx side is xxxxxxx equal xx right xxxx xxxx xx n x xxx

The required xxx xx xxxxx to xxxxx xxx goal is 11 years.

5.6

xxxxxxxxxxxx value

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