1. Simple Interest versus Compound Interest:

Suppose Dhaka Bank Ltd. Pays 5 percent simple interest

on its savings account balances, while Brac Bank Ltd. 5 percent interest compounded annually. If you

made a Tk.10,000 deposit in each bank, how much additional money would you earn from each of the

two banks at the end of 12 years?

2. Calculating Future Value:

For each of the following, calculate the future value:

Present Value

Years

Interest Rate

Future Value

$570

15

9%

$8922

9

18%

$61,133

3

12%

$$219,850

10

7%

3.

Calculating Future Value:

Find the Future Value to which Tk. 5000 will grow under each of the

following conditions:

a.

12 percent compounded annually for five years.

b.

12 percent compounded semiannually for five years.

c.

12 percent compounded quarterly for five years.

d.

12 percent compounded monthly for five years.

4. Calculating Interest Rates:

Solve the unknown interest rate in each of the following:

Present Value

Years

Interest Rate

Future Value

$475

4

$615

$7350

7

$18,350

$27175

11

$65,000

$93412

19

$200,000

5. Calculating Interest Rates:

Assume the total cost of BBA Program in Ease West University will be Tk.

650,000 after 8 years from now. You presently have Tk. 50,000 to invest. What rate of interest must

you earn on your investment to cover the cost of BBA Program under East West University?