Question $-1$:

$[10$ MARKS$]$

Your father recently got a promotion and applied for a car loan. He needs $$70,000$ for buying a BMW $7-$Series and the bank charges an interest of $12\%$ compounded per year? Since you are a student of Financial Management your father asks you to show how the interest amount and principal amount is repaid with the help of amortization table if the loan is for $6$ years? Show the amertization schedule.

Question$-2$: $q,$

$[4$X$2\mathrm{.}5=10$ MARKS$]$

a$)$ If you want to purchase a bond that has a $$1,000$ Face value and matures in $15$ years, and you would like to earn $10\%$ per year on the investment, using the basic bond pricing formula how much should you pay to acquire the bond today provided the discount rate is $6\%?$

b$)$ Tip and Tap Company has $7$ percent coupon, $5$ years maturity, $$1,000-$par$-$value bond on which interest is paid semi$-$annually. If the market required rate of return is $12$ percent, what is the market value of the bond?

c$)$ Assume that the bond from Tip and Tap company from part $($b$)$ paid no coupons. What would be the price of the bond under that scenario provided other facts from part $($b$)$ remains unchanged?

d$)$ A perpetual bond pays annual coupon of $$90$ the required rate is $13\mathrm{.}75\%$ and face value is $$1000.$ How much will you pay for the bond today?

Question$-3$: $q,$ MARKS