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Fundamentals of Financial Management, Third Edition by Vyuptakesh Sharan

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SOLVED NUMERICAL PROBLEMS
  1. A person saves Rs 10,000 every year for 18 years so that he will get a lumpsum amount thereafter to do a business. He expects that his savings should earn 8% interest. Find the size of the lumpsum amount.

    Solution

    Based on Eq. 2.5

    Rs 10,000 × {(1.0818 − 1)/0.08}

      = Rs 10,000 × 37.4502 = Rs 3,74,502.

     

  2. A company has to replace a machine after 21 years for which it deposits Rs 30,000 every year in the beginning of the year. In all, there are 21 installments deposited at the rate of 5% p.a. Find the future value.

    Solution

    Based on Eq. 2.7

    Rs 30,000 × {(1.0521 − 1)/0.05} × 1.05

      = Rs 30,000 × (2.7860/0.05) × 1.05

      = Rs 11,25,180.

     

  3. A shareholder receives dividend amounting to Rs 5000, Rs 5,200, Rs 5,500 and Rs 5,700 ...

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