Question

q1 ) Ahmed take out a loan of 4228 AED for 5 years. After 5 years he will payback 8400AED to clear his debt. What is the simple interest rate charge. Ans need need to be entered as fraction between 0 & 1 e.g 0.1151?

q2)khalid takes out a loan of 5426$ at 1% compound intrest , for 9 years. How much will he payback in 9 year ?

q3)a company XYZ plans to purchase a production line that cost annually 5000 AED paid at end of each year for ten years . starting the end of second year,, the annual payment decrease by amount of 5% every for the ten years period , for 10% intrest rate the total present worth is

1. 21,124 AED
2. 59,518 AED
3. 30,722 AED
4. 19,839 AED

q4)

a company XYZ plans to purchase a production line that cost annually 50,000 AED paid at end of each year for ten years . starting the end of second year,, the annual payment decrease by amount of 5% every for the ten years period , for 10% interest rate is :

______ what is the present worth of annual amount               A.95,000 AED

______ what is the present worth of gradient payment           B.30,722 AED

______ what is the present worth of present worth payment c.55,000 AED

______ what is the equivalent annual payment                        D .307,228 AED

                                                                                                    E.68,628 AED

                                                                                                    F. 421,684.9 AED

Answer 1

question 1

PRESENT VALUE=4228

N=5

FUTURE VALUE=8400

ANSWER.

FV= PV(1+R)^N

8400=4228(1+R)^5

8400/4228= (1+R)^5

1.9867= (1+R)^5 (SEE TABLE NO A)

in table no.A that is table of future value,in the 5 year collum there is 1.9867 is between the 14% and 15% .

so now for exact amount you need to calculate

RATE=LDF+ (HDF-LDF){(FVLDF-F)/(FVLDF-FVHDF)}

         =14+(15-14) {(1.9254-1.9867)/(1.9254-2.0114)

         =14+1(.7128)

         =14.71