**Question 11** You need to accumulate £ 10,000. To do so, you plan to make deposits of £ 1,250 per year, with the first payment being made a year from today, in a bank account which pays 12 percent annual interest compounded annually. Your last deposit will be less than £ 1,250 if less is needed to round out to £ 10,000. How many years will it take you to reach your £ 10,000 goal, and how large will the last deposit be?

**uestion 12** Your Company is planning to borrow £ 1,000,000 on a 5-year, 15 percent, annual payments, fully amortized term loan. What fraction of the payment made at the end of the second year will represent repayment of principal?

**uestion 13** You are branch manager of town centre Natwest Bank, Manchester. A borrower approaches you for a term loan of £ 500,000. You agreed to give loan to be fully amortized in a period of 5 year at 10 percent, annual payment. What will be the size of each installment? What fraction of the payment made at the end of second year represents repayment of interest?

**<pclass=”i1″ style=”color: rgb(0, 0, 0); font-family: Verdana, arial, sans-serif; font-size: 12px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: normal; orphans: auto; text-align: start; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px; -webkit-text-stroke-width: 0px; margin-left: 1cm; text-indent: -106.3pt;”>**

<pclass=”i1″ style=”margin-left: 1cm; text-indent: -106.3pt;”>

**. uestion 14**

<pclass=”i1″ style=”margin-left: 1cm; text-indent: -106.3pt;”>It is now January 1, 2007. You plan to make 5 deposits of £ 100 each, on every 6 months, with the first payment being made today. If the bank pays a nominal interest rate of 12 percent, but uses semiannual compounding, how much will be in your account after 10 years?

- Ten years from today you must make a payment of £ 1,432.02. To prepare for this payment, you will make 5 equal deposits, beginning today and for the next 4 quarters, in a bank that pays a nominal interest rate of 12 percent, quarterly compounding. How large must each of the 5 payments

<pclass=”i1″>**Question 15** The prize in last week’s Lottery was estimated to be worth £ 35 million. If you were lucky enough to win, then it will pay you £ 1.75 million per year over the next 20 years. Assume that the first installmeAshley has £ 42,180.53 in brokerage account, and plans to contribute an additional £ 5,000 every year at an annual interest rate of 12 percent. If Ashley has to accumulate £ 250,000, how many years will it take for him to reach his goal?nt is received immediately.

<pclass=”i1″><pclass=”i1″>

- If interest rates are 8 percent, what is the present value of the prize?
- If interest rates are 8 percent, what is the future value after 20 years?
- How would your answers change if the payments were received at the end of each year?

ques 16

<pclass=”msonormal”>Ashley has £ 42,180.53 in brokerage account, and plans to contribute an additional £ 5,000 every year at an annual interest rate of 12 percent. If Ashley has to accumulate £ 250,000, how many years will it take for him to reach his goal?