Solution Assignment No 1 MGT411 May 3,2010

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Question no 1
Part A (marks 04)
CPI = Cost of Basket that period /Cost of basket base period *100
Inflation rate = {(CPI that period – CPI preceding period)/ CPI preceding
period}*100

mgt 411..JPG

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Part B (marks 04)
GDP deflator = Nominal GDP/Real GDP*100
Inflation rate = {(GDP Deflator that period – GDP deflator preceding period)/ GDP
deflator preceding period} *100


mgt 411 (2)..JPG

Part C (marks 02)
M1 = Current account balances in Pakistan + ATM cards balances in Pakistan
M2 = Individual money market mutual fund+ Banks saving accounts in Pakistan
Question 2 marks 10
Part A (marks 05)
PV= Rs.100,000
RATE= i =5% p.a
YEAR =n=10
Compounded times = m = 4
FV =?
FV = PV*(1+i/m) ^mn
FV = 100,000*(1+0.05/4) ^10*4
FV=100,000*(1+0.0125) ^40
FV=100,000*(1. 0125) ^40
FV=100,000*1. 6436
FV = Rs.164, 361.9
Part B (marks 05)
FV= Rs 200,000
RATE=i =6% p.a
YEAR = m = 5
Compounding times = n=2
PV=?
PV= FV/ (1+i /m) ^mn
PV = 200,000/ (1+ 0.06/2) ^5*2
PV=200,000 / (1+0.03) ^10
PV=200,000 / (1. 03) ^10
PV=200,000 /1. 3439
PV = Rs 148, 818.8

[Awais]

1st one to get this solution here.. Thankx all the way...