CvLTAELG1AAv7GMjp8RSaPGsvS8 MGT201 GDB Solution fall 2013 required til 22 november 2013 |
Wednesday , 25 April 2018
Virtual University New old assignments, papers, GDB, Quizzez
Newest Assignments
You are here: Home - MGT201 - MGT201 GDB Solution fall 2013 required till 22 november 2013

MGT201 GDB Solution fall 2013 required till 22 november 2013

Total Marks 5
Starting Date Wednesday, November 20, 2013
Closing Date Friday, November 22, 2013
Status Open
Question/Description
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.

2 comments

  1. Share your ideas as soon as before 22nd November 2013

  2. a) Present value of insurance policy

    As the interest rate will increase present value of insurance policy will also increase:

    suppose:

    investment in insurance policy( present value) = 100 $

    Years to maintain investment = 10

    Rate of interest is 9.0%

    then by calculating its future value we find:-

    Future value is 237$

    Now if our years and investment remain same but we increase our rate of interest then calculation will be ass below:-

    investment in insurance policy( present value) = 100 $

    Years to maintain investment = 10

    Rate of interest is 9.5%

    then by calculating its future value we find:-

    Future value is 248$

    So we can see as the interest rate increase the future value of investment(insurance policy) will also increase.

    b) Future value of insurance policy

    As the interest rate will increase future value of insurance policy will Decrease:

    suppose:

    Earning after ten years ( Future value) = 100 $

    Years to maintain investment = 10

    Rate of interest is 9.0%

    then by calculating its Present value we find:-

    Present value is 42 $

    Now if our years and Earning remain same but we increase our rate of interest then calculation will be ass below:-

    Earning after ten years ( Future value) = 100 $

    Years to maintain investment = 10

    Rate of interest is 9.5%

    then by calculating its future value we find:-

    Future value is 40$

    So we can see as the interest rate increase the present value of invest policy will decrese

Leave a Reply

Your email address will not be published. Required fields are marked *

*

*