(a) A freehold estate is bought for Rs 2,750. At what rent should it be let so that the owner may receive 4% pa, compounded annually, on his purchase money?

(b) A man borrows Rs 500 at 5% rate of interest compounded annually. If the principal and the interest are to be repaid in 10 equal instalments, what should be the amount of each instalment?

(c) An investor has a capital of Rs 20,000 on which he earns interest@ 5% pa. If he spends Rs 1,800 per year, show that he will be ruined of his capital before the end of 17th year.

(d) Determine the present value of a perpetuity of Rs 100 payable at the end of the 1st year, Rs 200 at the end of the 2nd year, and Rs 300 at the end of the 3rd year, and so on, increasing by Rs 100 payable at the end of each subsequent year. Assume a time preference rate of 5% pa compounded annually.

(e) A pipeline is due for repairs. It will cost Rs 10,000 and last for 3 years. Alternatively, a new pipeline can be laid at a cost of Rs 30,000 and lasts for 10 years. Assuming cost of capital to be 10% and ignoring salvage value, which alternative should be chosen?