Financial Mathematics (Fin1101_144530)

Homeworks

Simple interest and Compound interest

1) Complete this table.
SIMPLE INTEREST
Present Value Rate Time Interest
$5000 5% 4 years ?
? 4% 2 months $1500
$3000 6% 8 months ?
$7500 ? 155 days PV/20
$8900 6.5% 324 days ?
$15000 5.6% ? PV/5

2) A man took a loan at rate of 3% quarterly simple interest. After 2 years and 6 months he had to pay
1740 SAR interest. Determine the principal amount borrowed.
3) Abdul-Aziz invested $8,200 at the rate of 4.5% p.a. It earned $738 simple interest. Calculate the period
of investment.
4) What is the number of periods to double your investment at 16% simple interest per annum?
5) Calculate the Ordinary Simple Interest amount charged and the total amount to be repaid on a loan of
150000 SAR over 90 days at 4.75% p.a.
6) You earned $1155 in interest from your simple interest account over the last 5 years. The account pays
1.25% interest annually. How much did you originally deposit in your account?
7) Calculate the amount of interest if PV = $5000; the annual simple interest rate i = 8.75% and n = 10
quarters.
8) Find the Exact Simple Interest of 20000 SAR borrowed at a simple annual percentage rate of 8% for
120 days.
9) Find the Present Value of 50000 SAR at 8.25% Ordinary Simple Interest for 210 days.
10) What is the effective interest rate of a $10000 simple discount note, at an ordinary bank discount rate
of 8.99%, for 120 days?
11) You made a note of $25000 with your friend at 6.99% simple interest based on exact interest and exact
time. The note is made for 123 days. Calculate the maturity value of the note.
12) Assume that the initial amount to invest is 2,000 SAR. What is the compound interest rate in order to
have 2,837.5 SAR after 6 years?
13) Ali wishes to invest $10000 for a period of 5 years. Which of the following investments would be best
for him?
A) 6.75% p.a. simple interest
B) 6.75% p.a. compound interest with yearly rests
C) 6.25% p.a. compound interest with monthly rests
D) 6% compound interest with daily rests

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 Financial Mathematics (Fin1101_144530)
Homeworks

14) A principal of 25000 SAR is invested at 12% interest compounded annually. After how many years
will it have exceeded 250000 SAR?

15) A man decides to increase his investment at a constant rate from its current level of 50000 SAR to
60000 SAR over the next 5 years. Calculate the annual compound interest rate required to achieve this
growth.

16) Ali uses his credit card on these transactions. The following table presents the card’s activity for the
last month:
Day Activity Balance

$650 Purchase ?
1-3

None ?
4-7

$250 Purchase ?
8-13

$500 Purchase ?
14-17

$100 Purchase ?
18-19

$300 Purchase ?
20-23

If the credit card APR is 12%, calculate your credit card interest for this month.

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 Financial Mathematics (Fin1101_144530)
Homeworks

Annuities
1) You begin working at age 23 and your employer deposits $200 at the end of each month into a
retirement account that pays an annual interest rate of 5% compounded monthly. You expect to retire
at age 60. What will be the size of your nest egg (deposits) when you retire?

2) You plan to withdraw at the beginning of each month $125 from an account of the next 25 years. If
the account pays 6% annually, what is the amount that you must deposit today in order to guarantee
these withdrawals?

3) A saving account offers 4.25% interest rate per annum, which is compounded quarterly. You deposit
3250 SAR at the start of each quarter starting with the first deposit on the first of January and the fourth
deposit on the first of October. What is the total amount in your account at the end of the 5 th year?

4) A loan is repaid by making payments of $783 at the end of every month for seven years. If interest on
the loan is 6.88% compounded monthly, what was the principal of the loan?

5) Calculate the monthly repayments needed to repay a 500000 SAR loan, which is repaid over 25 years
when the interest rate is 8% compounded monthly?

6) Suppose that you’d like to retire in 30 years, and you want to have a future value of 500000 SAR in a
savings account (Sinking fund). Also suppose that your employer makes regular monthly deposits into
your retirement account. If you can expect an annual interest rate of 9% for your account, how much
do you need your employer to deposit each month?

7) Assuming annuity payments of $5000 made only after 2 years, occurs at the beginning of periods 3, 4,
and 5 and the interest rate charged is 6% annually. Find the FVA of this deferred annuity.

8) A deferred annuity payments of 1500 SAR is made only after 2 years, occurs at the end of periods 3,
4, and 5 and the interest rate charged is 5% annually. Calculate the PVA of this deferred annuity.

9) You have decided to buy a perpetuity. The bond makes one payment at the end of every year forever
and has an interest rate of 8%. If you initially put $1000 into the bond, what is the payment every year?

10) An investor promises you to pay a cash dividend at the end of each year $2500, which will increase
every year by 1%. How much money would you give him if the interest rate is fixed at 4.75%.

11) You purchased a number of stocks in Apple. At the end of the first period, received $6000 as cash
dividend, which grows at a rate of 4% per year and continues forever. If the discount rate is 10%,
calculate the present value of your growing perpetuity.

12) The cash flows of Company A for next five years are $1500; $1850; $2100; $2500 and $2950.
Assume the discount rate is 15.75%. Calculate the present value of these uneven cash flows.

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 Financial Mathematics (Fin1101_144530)
Homeworks

Bond valuation and Short-term annuities

1) What is the value today of a 2000 SAR bond, 5% coupon rate with annual coupon payments if the time
to mature is 15 years and the market interest rate is 9%?

2) Let’s find a corporate bond value with an annual coupon rate of 8%, making semi-annual payments.
After two years, the bond matures and repays the principal. For our purposes, let’s assume $2000 a
face value and an annual market rate (yield to maturity) of 6%.

3) If coupon value = $1600; i = 13% ; n = 10 years. r =10% Find the Market Price of the bond?

4) Suppose you plan to deposit $3000 at the end of each two months into an account for one year and
half. If the account pays a simple interest equal to 10% annually, what is the value of the account at
the end of the period?

5) Suppose you plan to deposit $4500 at the end of each month into an account for one year and half. If
the account pays a simple interest equal to 10% annually, what is the value of the account after two
years?

6) Someone owes the following amounts:

1000 SAR payable after 2 months
3000 SAR payable after 5 months
6000 SAR payable after 8 months
It was agreed with the creditor to sign two new promissory notes with the same amount fixed at 4500
SAR. The first worth after 4 months, the second after 10 months and pay the rest owed cash
immediately.
Calculate the amount of cash paid by the debtor if we set the discount rate at 5% per annum.

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 ‫)‪Financial Mathematics (Fin1101_144530‬‬
‫‪Homeworks‬‬

‫تمارين عن التمويل اإلسالمي‬

‫‪ )1‬قرر محمد شراء سيارة بسعر ‪ 285000‬اير‪ .‬اتفق مع مصرف اسالمي على تمويل السيارة بموجب عقد مرابحة بمعدل‬
‫ربح سنوي ‪ %3.5‬ودفع دفعة أولى بقيمة ‪ 105000‬اير و تسديد الباقي على أقساط شهرية متساوية لمدة ‪ 5‬سنوات‪.‬‬
‫• احسب قيمة القسط الشهري‬

‫‪ )2‬قرر محمد شراء سيارة بسعر ‪ 225000‬اير‪ .‬اتفق مع مصرف اسالمي على تمويل السيارة بموجب عقد مرابحة ينص‬
‫على دفعة أولى بقيمة ‪ 75000‬اير و تسديد الباقي على أقساط شهرية متساوية لمدة ‪ 5‬سنوات قيمة كل قسط ‪3031.25‬‬
‫اير‪.‬‬
‫• احسب معدل أو هامش الربح السنوي للمصرف اإلسالمي‬

‫‪ )3‬لنفترض مضاربة بقيمة ‪ 750000‬اير بين طرفين حيث يقدم الطرف األول رأس مال المضاربة بصفته رب المال‬
‫صة من الربح متفق عليها‬
‫)مصرف إسالمي( ويقدم الطرف الثاني المضارب جهده الستثمار المال مقابل حصوله على ح ّ‬
‫مسبقا‪.‬‬
‫اتفق الطرفان على أن يكون تقاسم األرباح بنسبة ‪ %45‬للطرف األول )المصرف اإلسالمي( و ‪ %55‬للطرف‬
‫الثاني)المضارب( إذا كانت األرباح ‪ %25‬أو أقل من رأس المال المستثمر وكل نسبة تتجاوزها تعود للمضارب‪.‬‬

‫‪ -‬ما هو نصيب كل طرف (نصيب المضارب ونصيب المصرف) إذا حقق المضارب أرباحا بنسبة ‪%20‬؟‬
‫‪ -‬ما هو نصيب كل طرف (نصيب المضارب ونصيب المصرف) إذا حقق المضارب أرباحا بنسبة ‪%35‬؟‬
‫‪ )4‬اتفق مهندس زراعي مع مصرف إسالمي على تمويل في شكل مشاركة منتهية بالتمليك لمزرعة دواجن بقيمة‬
‫‪ 882000‬اير مع العلم أن التكلفة اإلجمالية إلنشاء المزرعة قدّر ب ‪ 1282000‬اير وأن صافي الناتج الشهري لهذا‬
‫المشروع ‪ 49000‬اير‪ .‬اتفق الطرفان على أن يكون تقسيم األرباح كالتالي ‪ %20 :‬من صافي الناتج الشهري للبنك‬
‫و‪ %30‬للمهندس الزراعي و‪ %50‬إلطفاء رأس المال‪.‬‬
‫‪ -‬أحسب مساهمة المهندس في هذا المشروع‬
‫‪ -‬أحسب نصيب المصرف الشهري من األرباح‬
‫‪ -‬أحسب نصيب المهندس الشهري من األرباح‬
‫‪ -‬أحسب كمية رأس المال المطفأ‬
‫‪ -‬أحسب المدة المطلوبة لكي تنتهي الشراكة بين الطرفين‬
‫‪ -‬أحسب المعدل السنوي لربح البنك‬

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