Instructions Valuation
The very basic of Financial Mathematics
Financial Mathematic
Seminar
Luděk Benada, Dagmar Linnertova
Department of Finance - 402, benada.esf@gmail.com
October 13, 2017
The Study materials prepared by
Mikhail Dmitrievich Balyka
Luděk Benada
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Exercise 1
You put 333$ into a bank account 4 times per year (at the beginning of each quarter) for 25 years
at 4,5% p.a. Interest is calculated monthly.
‼BUT, to avoid inflation, every quarter you deposit 0,5% more (i.e annuity2/annuity1=1,005).
S25yrs - ?

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Exercise 2
You put 200 000$ into a bank account at 2% p.q. You pay 5 000$ to open this account and also at the
end of each month you pay a bank fee 200$.  Interest is calculated quarterly.
Find the average annual return on this investment

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Exercise 3
You put 15 000 $ into a bank account at the end of each quarter at 3,7% p.a. for 10 years. Interest
is calculated 2 times per year. Tax rate is 15% and it’s calculated at the end of investment’s
period
Stax -?

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we deduct our annu-s (# of ‘a’ in one TP)
mult-ing  by the % retained after tax and adding back our ‘a’ we will get ‘S’ after tax

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