OGE- 2021
Assignment No.1
Question one:
What is the future worth three years from now of a present sum of $5000 if:
a. the interest rate is 10% compoundedannually.
b. the interest rate is 10% compoundedquarterly.
c. the interest rate is 10% compounded continuously.
d. an effective annual rate for 10% compounded continuously.
Question two:
What is the presentvalue of $500 payments to be made at the end of each
6 month period for the next 10 years if interest is 8% compoundedsemi-
annually?
Question three:
What amount of money must be deposited in a saving account at the end
of each quarter for the next 5 years to accumulate $10,000 in 5 years if
interest is 6 % compounded quarterly.
Question four:
Determine the uniform series of end of year payments required to amortize
a $ 15,000 loan in 5 years if interest is:
a. 7 % per year compounded continuously.
b. 7 % per year compoundedannually.
c. an effective annual rate for 7% compounded continuously.
Question five:
What nominal annual interest rate is equivalent to an annual interest rate
equal to 20 % if interest is compoundedquarterly?

OGE- 2022
Assignment No.1…continued
Question six:
What uniform annual costfor ten years is equivalent to a single $ 10,000
costten years from now if interest is 8% per year?
Question seven:
What payments each year are equivalent to $3,000 payments at the end of
years three, six and nine from now if interest is 10 % compounded
annually? Also, determine the future worth of these payments at the end of
year nine.

OGE-2022
Assignment No. 2
1) The cash flow profiles for two projects are as follows.
Project Initial Investment
($)
Average Annual
Earnings ($)
Estimated Life Time
(years)
A 200,000 20,000 14
B 200,000 22,000 12
Based on payout period (P.P) and profit to investment ratio (P/I) which project would
you select?
2) The cash flow profiles for two projects are as follows.
Project Ini. Invest.
($MM)
Annual Cash Flow ($MM/Y)
Salvage
Value
($MM)
Year1 Year2 Year3 Year4 Year5 Year6
1 11 -1 -.5 3 4 3.5 3 0.5
2 11 2 3 2.5 2 1 0.5 1.7
Based on profit to investment ratio (P/I) which project is more profitable?

Assignment Nos.3&4
1. What annual end of year payment is required to pay off $10,000
mortgage in five years if the interest rate (i) is 10 % per year.
2. Determine the sum of money that must be invested today to give an
annual income of $ 5,000 for ten years if interest rate is 12% per year.
3. Calculate the sum of money that will accumulate in 10 years if
$ 1,500 payment is to be invested at the end of each year
with an interest rate of 18% per year.
4. The table below includes data for three projects.
Project
Investment/Cost
($)
Profit/Revenues
($/year)
Salvage
($)
Project’s
life
(years)
1 500,000 100,000 240,000 7
2 600,000 200,000 250,000 9
3 700,000 300,000 300,000 5
Using the Net Present Value method to determine if project1, 2 or 3 is
economicallyacceptable;if i* (interest rate) is 10 %.
1. Referring to the time diagram below, a project’s cost/investment is
$12,000.This project is aimed to generate revenues of $6,000,$8,000
and $10,000 at the end of year 1, year 2 and year 3 respectively.
Revenues(A) Revenues (A) Revenues (A)
I/C=$12,000 $ 6,000 $ 8,000 $ 10,000
0 Year 1 Year 2 Year 3
The minimum rate of return i* is 15%.Use the NPV and ROR
methods/techniquesto determine if this projectis economicallyacceptable.