Latest Activity In Study Groups

Join Your Study Groups

VU Past Papers, MCQs and More

We non-commercial site working hard since 2009 to facilitate learning Read More. We can't keep up without your support. Donate.

MGT201 Financial Management Graded Discussion Board (GDB) NO.1 Solution and Discussion Fall 2013 Due Date: November 22, 2013

Topic for Discussion: “Present Value and Discounting?”

GDB Question:

Few days ago, the State Bank of Pakistan (SBP) has raised interest rate up to 9.5 percent from 9.0 percent, in line with requirements set by the International Monetary Fund. This increase was in a need to curtail rising inflation by tightening the flow of liquidity through higher interest rate. You were planning to purchase an insurance policy. What will be the effect of this rise in interest rate on:

a)        Present value of insurance policy

b)       Future value of insurance policy

Important Instructions:

  • Your discussion comments must be based on logical facts.
  • Your comments should be brief and to-the-pointAvoid unnecessary details.
  • Your discussion should not exceed 120 words
  • The GDB will open and close on above specified date and time. Please note that no grace day or extra time will be given for posting comments on GDB.
  • Use the font style “Times New Roman” and font size “12”.
  • Your answer should be relevant to the topic i.e. clear and concise.
  • Do not copy or exchange your answer with other students. Two identical / copied comments will be marked Zero (0) and may damage your grade in the course.
  • Books, websites and other reading material may be consulted before posting your comments; but copying or reproducing the text from books, websites and other reading materials is strictly prohibited. Such comments will be marked as Zero (0) even if you provide references.
  • You must post your answer on the Graded Discussion Board (GDB), not on the Moderated Discussion Board (MDB). Both will run parallel to each other during the time specified above. Therefore, due care will be needed.
  • Obnoxious or ignoble answer should be strictly avoided.
  • You cannot participate in the discussion after the due date via email.
  • Questions / queries related to the content of the GDB, which may be posted by the students on MDB or via e-mail, will not be replied till the due date of GDB is over.

Views: 5331

Replies to This Discussion

Every thing is right but what is the final answer.

pata nae . koe asay bol raha to koe , pv ko up kar rahai or FV ko less :( 

Right 

When the interest rate increase present value of the policy will be decreased and future value of the policy will be increased.

ya to first jo is site k Admin nay solution dia hai is k hisab say theak hai or book k hisab say b ,but policy ko as lon lay k or persent mn pofit lay rahe hn k g, agar ap ka loss aj ho jaye to ap ko aj ki date mn he fix ki gaye amount of profit mil jaye to to is ka kea ho ga ?? or is ka ans to asy hai :( As the interest rate will increase
present value of insurance policy will also increase.
future value of insurance policy will Decrease

mara bano ta paravo 

koyae full and final daso g.

time is tight.

AP ny to aur b complex kr di situation

Before we going to answer of gdb 1st understand the  Present Value Versus Future Value in world of finance. Present value is a fundamental concept in the world of finance. It refers to the current worth of a future stream of cash flows or amount of money at a given rate of return. Future value is the dollar amount that the investor will receive in the future. Analysts arrive at present value through the discounting process -- discounting future value. The concept helps you make financial decisions, especially when you are considering expected future returns.

How to Calculate Present Value?

The formula to figure out present value is: Present Value = Future Value/(1+Interest rate). Example: If you want to make $800 in one year and the interest rate is 5% or .05, present value = $800/1.05). The amount you invest today would have to be $761.90.

How to Calculate Future Value?

Future value is the compounding of interest earned on the present value, or starting amount. Subtract the present value from the future value: Amount of Interest = FV - PV.

When the interest rate increase present value of the policy will be decreased and future value of the policy will be increased.

Reason?
Mathmetical formuly k alwa koe reason?

RSS

© 2021   Created by + M.Tariq Malik.   Powered by

Promote Us  |  Report an Issue  |  Privacy Policy  |  Terms of Service