A 4-year annuity of Rs 3,000 per year is deposited in a bank account that pays 9% interest

compounded yearly. The annuity payments begin in year 12 from now. What is the FV of the

annuity?

Q 2. In setting up an educational fund, a person agrees to make five annual payments of Rs 5,000

each into a 'college fund programme'. The first payment is to be made 12 years from now and the

'college fund programme' wishes that upon making the last payment, the amount available should

have grown to Rs 30,000. What should be the minimum rate of return on this fund?

Q 3. Mr X has to receive Rs 10,000, Rs 5,000 and Rs 2,000 at the end of first, second and third year

from an investment proposal. Calculate the present value of his future cash flows from this

investment proposal if rate of interest(discount rate) is 10% per annum.

Q 4. Mr X has rented out a portion of his house for 4 years at an annual rent of Rs 6,000 with the

stipulation that rent will increase by 10% every year. If the required rate of return is 15%, what is the

present value of the expected series of rent?

Q 5. Mr X wants to purchase a house for Rs 50,00,000. He is planning to pay a down payment of Rs

10,00,000 out of his resources. Remaining he will borrow from a housing finance company at 10%

p.a. interest rate. The loan is to be paid in 15 equal annual instalments beginning after 3 years from

now. Find out the amount of annual instalments to repay this loan.