INSTITUTE OF BUSINESS & TECHNOLOGY

(BIZTEK)

ASSIGNMENT NO-1

“TIME VALUE OF MONEY”

NAME: JUNAID SHUJAT

STUDENT ID: BM-25183

COURSE: BUSINESS FINANCE-2

CLASS TIME: 9:00AM TO 12:00PM (SATURDAY)

Q-1 If you invest $18,000 today, how much will you receive after ten years at a 7 percent annual
interest rate?

a) $35,408

b) $35,804

c) $53,408

d) $15,408

Q-2 If a deposited $1,000 in a saving account. The annual interest rate is 10 percent, compounded
semiannually. How many years will it taken for money to grow to $2,653.307?

a) 9 years

b) 10 years

c) 9.5 years

d) 11 years

Q-3 The property you purchased twelve years ago for $80,000 is now worth $400,000. What is the
compounded annual rate of return you have earned on this investment?

a) 13.35 interest rate

b) 14 interest rate

c) 10.35 interest rate

d) 14.35 interest rate

Q-4 What is the amount you have to invest today at 7 percent annual interest to be able to receive
$20,000 after five years?

a) $28,051

b) $14,260

c) $18,691

d) $14,620
Q-5 Farhan’s grandmother died and provided in her will that farhan will receive $100,000 from a trust
when farhan turns twenty-one years of age, ten years from now. If the appropriate discount rate is 8
percent. What is the present value of this $100,000 to farhan?

a) $46,319.35

b) $215,892.5

c) $503,383.4

d) $19,865.70

Q-6 It is the beginning of the quarter and you intent to invest $300 into your retirement fund at the end
of every quarter for the next thirty years. You are promised an annual interest rate of 8 percent,
compounded quarterly.

a) $614,477.44

b) $164,477.44

c) $146,477.44

d) $416,774.44

Q-7 What is the future value of $10, earning 8 percent semi annually interest, 100 years later?

a) $48,389,495.8

b) $25,507.5

c) $21,997.6

d) $505

Q-8 You invested $1,000 five years ago, and the value of your investment has fallen to $773.78. What is
your compounded annual interest rate of return over this period?

a) 15 interest rate

b) 6 interest rate

c) 5 interest rate

d) -5 interest rate
Q-9 Indicate the number of periods (n) and the interest rate per period (k) for the following:

10 years, 8 percent annual interest rate, compounded monthly.

a) 10 period and 0.8 interest rate per period.

b) 12 period and 0.66 interest rate per period.

c) 12 period and 0.8 interest rate per period.

d) 10 period and 0.66 interest rate per period.

Q-10 What is the amount you have to invest today at 7.7percent quarterly interest rate to be able to
receive $777,000 after 7 years?

a) $455,576

b) $554,576

c) $462,286

d) $455,675