1. - 10 6 6 6 6 6 All figures in Lacs of Rs

2. A= P(1+i) n Compounding Discounting Present Sum, P Future Amount, A

3. 0 1 2 3 … n-1 n F = P (1+ i ) n = P (CF sp ) P F n= no of periods i= interest rate per period

4. 0 1 2 3 … n-1 n P = F 1/ (1+ i ) n = F (PV sp ) P F n= no of periods i= interest rate per period

5. 0 1 2 3 … n-1 n A A A A A F F = A [(1+i) n - 1]/i = A (Compounding factor for annuity)

6. 0 1 2 3 … n-1 n A A A A A F A = F. i/ [(1+i) n - 1] = F (Sinking fund deposit factor

7. 0 1 2 3 … n-1 n A A A A A P = A [1-(1+i) -n ]/i = A (present value factor for annuity) P

8. 0 1 2 3 … n-1 n A A A A A A = P i/ [1-(1+i) -n ] = P (capital recovery factor) P

10. P = A/(1+i) + A/ (1+i) 2 +... + A/(1+i) n P A A A 0 1 2 … n Years P = A (1+i) n – 1 or A = P i(1+i) n i(1+i) n (1+i) n – 1 For i = 12% = 0.12; n=5 years and P=Rs 5 Lakhs A = 5 * 0.2775 = Rs 1.3875 lakhs. Capital Recovery Factor

11. 10L 2L 4L 6L 6L 4L Gross 2 4 6 6 4 income