Time Value of Money

• Assume that you need Rs.1,000 in 2 years.

Let’s examine the process to determine how
much you need to deposit today at a discount
rate of 7% compounded annually.
• Rs. 873.44
• A person wants to know how large of a
deposit to make so that the money will grow
to Rs.10,000 in 5 years at a discount rate of
10%.
• Rs.6,209.21
• What will a deposit of Rs.4,500 at 10%
compounded semiannually be worth if left in
the bank for six years?
• Rs.8081.353467
• What is the Present Value at a discount rate of
10% of the following cash flow:

Time Rs.
After 1 year 600
After 2 years 600
After 3 years 400
After 4 years 400
After 5 years 100
• Rs. 1677.15
• What will a deposit of Rs.4,500 at 12%
compounded monthly be worth at the end of
10 years?
• Rs.14851.7410