DSC1630 Assignment 2 Semester 1 Memo | Due 25 March 2026

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ASSIGNMENrf 2-SEMESTrER 1
Altl: QUES ll!INS Pltll:tl AN WERED
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DUE: 25 MARltH 2026 +




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RELEVA T GUIDELINES DR STAND RDS-. ~

, PLEASE USE THIS DOCUMENT AS A GUIDE TO ANSWER YOUR ASSIGNMENT

 Question 1: Present Value of a Loan

1. Identify the Problem Type

This is an Ordinary Annuity because there are equal payments (R = 250) at equal time
periods (every 6 months) and the interest is compounded. Since it does not state payments are
"invnediate· °' at the "beginning,• we assume they occur at the end of each period.
2. Timellne
• Start (TO}: Present Value (P V) is unknown.

• Period 1to 20: Payments of R = 250 occur every 6 months.

• End (Year 10): The 20th and final payment is made.


3. Given Values

• R = 250 (Payment amount)
• L=10 (Number of years)

• 1n = 2(Compounded f!Very six months/ semi-annually)

• im = 0.05 (Nominal interest rate)
• n = l x n1 = 10 x 2 = 20 (Total number of periods)

• i = 7,; = ~ = 0.025 (Interest rate per period)