The Time Value of Money (TVM ) is important in determining the value of financial assets for any investor in these assets. It normally applies the compound interest to determine either future values or Present values of the underlying assets.

(a ) Board H has anominal value of K1000 and a compound rate of 10% , paid semi-annually for 20 years . the appropriate required rate of return is 14% ..Calculate the value of this bond .

( b) B. Ngoma wishes to buy K70million worth of a capital item in 15 years from now. How much should he put aside in a bank account paying a nominal rate of 9% on a one year deposit ?

( c ) JIMAKAKA Ltd issues a bond with a par value of K1000 for 30 years 0n 1st January 2014. At the time of issue it was trading at par. Two years later , the bond was trading at K1200. The coupon rate of the bond was 15%. Calculate the Yield to Maturity (YTM) on this bond

( d ) KOMOKA limited issued a bond with a par value of K2000 for 15 years . The coupon rate on the bond was 12%. Implementing a condition of buying back, the company bought back the 8bond after 5 years at a premium of 10% . Calculate the Bond's Yield to Call (YTC)

( e ) Common stock P has an expected dividend growth of 6% .Each shsre of the stock , just received annual dividend of K3.50 .The required rate of return is 10% .Calculate the value of this stock using the Golden Model .

( f ) Determine the present value of an annuity of K5000 to be received at the end of each year for 30 years when the discount rate is 8%.