Time Value of Money, Simple and Compound interest, Bangla Tutorial-1 finance honours 1st year

Time value of Money, Simple and Compound interest, Business Mathematics, Principals of Finance, Managerial Finance, Finance & Capital Market, Time value of money (introduction) – Financial Management (FM) Time value of Money, Concept explained Simple VS Compound interest. To watch the videos continuously, go to the Play Store and download our Education BD mobile app. Or download the Education BD app by clicking on the link below. Android App: National university of Bangladesh NU Please Like, Comment and Share the Video among your friends and family members For latest updates subscribe My channel. Time Value of Money Simple Interest. mij my` Compound Interest. Pµe „w × my` Compound Interest FV = PV 〖(1 + r) ^ n Installment / wKw¯Íi K_v _vK ‡ jt PV = A / r {1-1 / (1 + r) n} FV = A / r {(1 + r) ^ n-1} m = Maturity Period (c ~ Y © Zv cÖvwßi mgq Kvj) Find the compound interest on tk. 10,000 for 4 years at 5% per annum. What will be the simple interest in the above case? Solutions: here Present value PV = 10000 Rate of interest r = 5% = 5/100 = .05 Number of year n = 4 we know, FV = PV 〖(1 + r)〗 ^ n = 10000 (1 + .05 ) ^ 4 = 1000 × 1.21550625 = 12,155.06 So interest = Fv-Pv = (12,155.06-10000) = 2,155.06 For Simple Interest: I = Pnr = 10000 × 4 × .05 = Tk.2000 (Ans) What sum of money invested at 8% per annum? Payable half-yearly for 2 years will amount to tk.1000? Here, Fv = 1000 r = 8% = 8/100 = 0.08 m = 2 n = 2 PV =? we know, FV = PV 〖(1 + □ (r / m))〗 ^ nm 1000 = PV (1 + □ ((. 08) / 2)) ^ (2 × 2) 1000 = PV × 1.16985856 PV × 1.16985856 = 1000 PV = 1000 / (1.16985856) PV = 854.80 Principal Amount = 854.80 Find the number of years and the fraction of years in which a sum of money will treble itself at compound interest at 8% per annum. Here, let present value or principal amount pv = 100 so, future value Fv = 100 × 3 = 300 rate of interest r = 8% =. 08 Number of year n =? we know, Fv = pv 〖(1 + r)〗 ^ n 300 = 100 〖(1 + r)〗 ^ n 100 (1 + r) ^ n = 300 (1 + r) n = 300/100 (1) + r) = n = 3 log⁡ (1 + .08) n = log3 n log1.08 = log3 n = log3 / (log1.08) n = (. 477121254) / (. 033423755) n = 14.27 years. (Ans) Present Value Example: What sum should be paid for an annuity of tk 2400 for 20 years at 4.50% compound interest per annum? Solution: Here, Annual installment A = 2400 Rate of interest r = 4.5% = (4.5) /100=.045 Number of year n = 20 Pv =? We know, Pv = A / r {1-1 / (1 + r) ^ n} = 2400 / (. 045) {1-1 / 〖(1 + .045) ^ 20} = 2400 / (. 045) ) {1-.414642859} = 53,333.33 × .58535714 = 31,219.05 so, present value tk. 31,219.05. (Ans) A loan of tk. 40,000 is to be paid in equal annual installment consisting of principal and interest due in course of 30 years. Find the amount of each installment reckoning interest at 4% per annum. Solution: here, pv = 40000 r = 4% = 4/100 = .04 n = 30 years A =? we know, Pv = A / r {1-1 / (1 + r) ^ n} 40000 = A / (. 04) {1-1 / 〖(1 + .04)〗 ^ 30} 40000 = A / ( .04) (1-.308318668) 40000 = A × 17.2920333 A × 17.2920333 = 40000 A = 40000 / (17.2920333) A = 2,313.20 So Annual installment tk. 2,313.20 (Ans) A man Borrows Tk.1,000 on the understanding that it is to be paid back in four equal installments at intervals of six months the first payment to be made six months after the money was borrowed. Calculate the amount of each installment reckoning compound interest at 2.5% per half year. Solutions: Pv = 1000 r = 2.5% 2 = 5% = .05 m = 2 n = 2 A =? we know, Pv = A / □ (r / m) {1-1 / (1 + □ (r / m)) ^ nm} 1000 = A / □ ((. 05) / 2) {1-1 / ( 1 + □ ((. 05) / 2)) ^ (2 × 2)} 1000 = A / (. 025) {1-.905950644} 1000 = A × 3.761974208 A × 3.761974208 = 1000 A = 1000 / (3.761974208) A = 265.82 So installment Tk.265.82 (Ans) Future Value Calculate the amount of future value of an annuity of tk3000 for 15 years if the rate of interest be 4.50% per annum. Solution: here Annual installment A = 3000 rate of interest R = 4.50% = (4.50) /100=.045 number of year n = 15 FV =? You can see my other videos … FIFO Method, Financial Accounting Bangla lecture-2 By Lecturer Md. Mostafizur Rahman Accounting Equation Part-2 (FINANCIAL ACCOUNTING) BANGLA Tutorial leverage Part-1 Financial Management. Set (Set) Business Application, Lecturer-1 [ Business Mathematics]

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Time Value of Money, Simple and Compound interest, Bangla Tutorial-1

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Time Value of Money, Simple and Compound interest, Bangla Tutorial-1
finance honours 1st year
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