Question 02 I. Bank X pays 12 per cent and compounds interest quarterly. If Rs 200,000 is deposited initially, how much shall it grow at the end of 6 years? Find effective annual rate (EAR) II. We can...

Extracted text: Question 02 I. Bank X pays 12 per cent and compounds interest quarterly. If Rs 200,000 is deposited initially, how much shall it grow at the end of 6 years? Find effective annual rate (EAR) II. We can make an immediate payment now of Rs 130,000 or pay equal amount of A for the next five years , first payment being payable after 1 year. 1) with a time value of money of 12 per cent , what the maximum value of A we would be willing to accept? 2) What maximum value of A we would be willing to accept if the payments are made in the beginning of the year? III. You buy a house for Rs50 lakh and immediately make cash payment of Rs 10 lakh. You finance the balance amount at 12 percent for 20 years with equal annual installments. How much are the annual installments? How much of the each payment goes towards reducing the principal? IV. An account earning 6.6% interest compounded continuously for 10 years would have a balance of how much if the principal was Rs 5500.