a).iMutale with the intention of raising appropriate funds in 2025,

deposited K50million in an account, paying a nominal rate of 6%, compounded semi-

annually, in 2016. What would this amount be in 2025?( 2marks)

ii J. Mumba wishes to buy a K68 million worth of an item in 10 years from now, how much should he put aside in a bank account paying nominal rate of 4% on a 1 year deposit?(2marks)

b)i. You have just received a notification that you have won K8000000, second prize in a local lottery. The prize will be paid to you on your 30 th birth day. Your current age is 25 years. What is this prize today if the required rate of return is 10%? (4marks)

ii. Determine the present value of annuity of K 3000 to be received at the end of each year for 15 years when the discount rate is 8%.(2 marks)

iii. Determine the present value of an annuity of K 5000 received at the beginning of each year for 10years at the required rate of return of 10%. (2marks)

3 c). J. Kamanga obtained a K60 million loan from a reputable local financial institution payable in five years at a nominal rate of 10%.

The loan was obtained for the purpose of expanding his exploits in agriculture. The loan agreement required Kamanga to make five equal annual instalments, each instalment consisting both the principal and interest elements. Prepare an Amortization Schedule, using the time value of money (TVM) approach.( 8 marks) ( 20 marks)