1 Given the following cash flow payments End of year KD 0 0 1 500 2 0 3 200 4 200 5 200 6 0 7 400 Assume that interest rate is effective per year and varies as follows from 0 to 2, i 10 , from 2 to 5, i 8 and from 5 to 7, i 9 Draw the cash flow diagram Find the present value using both single formula and equal formula Find the future value using both single formula and equal formula Suppose you are planning to deposit monthly payment of 100 KD for 4 years in a saving account that provides 12 compounded semi annually Draw the cash flow diagram then determine the present value Suppose you are planning to deposit quarterly payment of 500 KD for 6 years in a saving account that provides 12 compounded monthly Draw the cash flow diagram then determine the future value Suppose your plan for the next three years is as follows Deposit a uniform gradient monthly payments that start at end of the first month with 400 KD and monthly increment of 10 KD for three years in a saving account that provides 12 compounded monthly Draw the cash flow diagram then determine the equivalent equal monthly payments and the equivalent present value Par value of a bond is 10,000 KD The bond gives 12 compounded quarterly and will mature on 6 years What is the market price of this bond if you are satisfied with interest rate of 8 compounded quarterly Also find the current yield of this bond Determine the current yield and yield to maturity of a bond with the following information Market Value 2000 KD Face value 1200 KD Bond rate 9 compounded annually Number of period till maturity 8 years How much can be paid for a KD 20,000, 8 bond with interest semi annually, if the bond matures 10 years hence Assume the purchaser will be satisfied with 5 96 interest compounded quarterly, since the bonds were issued by a very stable and solvent company A loan of 20,000 KD is to be returned in a monthly basis during a total period of time of 5 years with interest rate of 24 compounded monthly calculate the equal payments of this loan and draw the cash flow diagram Find the remaining balance exactly at the end of the third year Consider the payment made exactly at the end of the third year, how much of it goes to the interest and how much goes to the principle of the loan

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Posted on Jul 26, 2024

1- Given the following cash flow payments:

Assume that interest rate is effective per year and varies as follows: from 0 to 2, i = 10%, from 2 to 5, i= 8% and from 5 to 7, i=9%.

Suppose you are planning to deposit monthly payment of 100 KD for 4 years in a saving account that provides 12% compounded semi-annually. Draw the cash flow diagram then determine the present value.

Suppose you are planning to deposit quarterly payment of 500 KD for 6 years in a saving account that provides 12% compounded monthly. Draw the cash flow diagram then determine the future value.

Suppose your plan for the next three years is as follows: Deposit a uniform gradient monthly payments that start at end of the first month with 400 KD and monthly increment of 10 KD for three years in a saving account that provides 12% compounded monthly. Draw the cash flow diagram then determine the equivalent equal monthly payments and the equivalent present value.

Par value of a bond is 10,000 KD. The bond gives 12% compounded quarterly and will mature on 6 years. What is the market price of this bond if you are satisfied with interest rate of 8% compounded quarterly? Also find the current yield of this bond.

Determine the current yield and yield to maturity of a bond with the following information: Market Value = 2000 KD - Face value = 1200 KD - Bond rate = 9% compounded annually - Number of period till maturity = 8 years

How much can be paid for a KD 20,000, 8% bond with interest semi-annually, if the bond matures 10 years hence? Assume the purchaser will be satisfied with 5.96% interest compounded quarterly, since the bonds were issued by a very stable and solvent company.

A loan of 20,000 KD is to be returned in a monthly basis during a total period of time of 5 years with interest rate of 24% compounded monthly.
1. calculate the equal payments of this loan and draw the cash flow diagram
2. Find the remaining balance exactly at the end of the third year
3. Consider the payment made exactly at the end of the third year, how much of it goes to the interest and how much goes to the principle of the loan?