fast please with explanation Question 3If you are LOANING money toanother party, would you prefer tooffer a 12% interest ratecompounded quarterly or a 11.5%interest rate compoundedcontinuously? (Hint: Compare theireffective interest rates)12% compounded quarterly11.5% compounded continuously

The formula for compounding quarterly is : FV = PV*[1+(i/4)]4*t Whereas, PV = Present value, i =…

Answered: If you are LOANING money to another…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Similar questions

Q9 A deposit of $720 earns interest rates of 8 percent in the first year and 11 percent in the second year. What would be the second year future value? (Round your answer to 2 decimal places.) FUTURE VALUE?
Question 2 The following interest rate structures are on offer by three independent banks: Tree Bank: 16% compounded annually; Branch Bank: 15% compounded monthly; Leaf Bank: 15% compounded quarterly. Note: Assume 365 days in a year. Q.2.2 Rank the three options from most preferable to least preferable to a borrower, with a reason why.
Determinants of Interest Rates Problem Illustration: (1 + nominal) 1 Solving for the Real Rate of Interest real (1 + inflation) You have managed to build up your savings over the three years following your graduation from college to a respectable P100,000 and are wondering how to invest it. Your banker says they could pay you 5% on your account for the next year. However, you recently saw on the news that the expected rate of inflation for next year is 3.5%. If you are earning a 5% annual rate of return but the prices of goods and services are rising at a rate of 3.5%, just how much additional buying power would you gain each year? Stated somewhat differently, what real rate of interest would you earn if you made the investment?
which one is correct please confirm? QUESTION 31 What is the effective rate of interest on a CD that has a nominal rate of 9.5 percent with interest compounded monthly? a. 9.86% b. 9.93% c. 10.02% d. 9.74%
QUESTION 3 If you deposit today 11,445.85 in an account earning 8% compound interest, for how long should you invest the money in order to earn 12,488.36 (profit)?
Question A .Consider the following series of payments which start at time t = 0: 5, 7, 9, 11... What is the value of this series of payments at time t = 6? Effective annual interest rate is 8% p.a. Question 7Select one:Select one: A. 92.68 B. 122.44 C. 68.72 D. 103.28 Full explain this question and text typing work only We should answer our question within 2 hours takes more time then we will reduce Rating Dont ignore this line
Problem 3 Suppose that risk-free zero interest rates with continuous compounding are as follows: 4 Maturity(years) Rate (% per annum) Forward Rate 1 2.0 2 3 3.0 3.7 ? ? 4.2 ? 5 4.5 ? Calculate forward interest rates for the second, third, fourth, and fifth years. Problem 4 Use the risk-free rates in the previous Problem. You are entering an FRA where you will pay 5% (annually compounded) for the third year and receive LIBOR on $1 million. The forward LIBOR rate (annually compounded) for the third year is 5.5%. What is the value of the FRA today?
Q16 A certificate of deposit (CD) often charges a penalty for withdrawing funds before the maturity date. If the penalty involves two months of interest, what would be the charge for early withdrawal on a $10000 CD with a 3.0% interest rate APR, compounded monthly?
A certain some of money P draws interest compounded continuously. If a certain time there are Po dollars in the account, determine the time when the financial attains the value of 2Po dollars if the annual interest rate at 2%
Q2: Consider a saving account that offers a nominal interest rate of 5% per annum and payable weekly compounded. What is the effective interest rate (%)? Hint: Consider 52 weeks in a year 5.124 5 5.114 5 5.134 5 5.144 55
Question Suppose that a perpetual annuity has a present value of $33 million. What interest rate r would allow for perpetual annual payouts of $1.8 million? Express the interest rate as a decimal rounded to three decimal places. Do not include the dollar sign in your answer. Provide your answer below: ● Il CURMIT
Explanation it correctly Q)Which of the following interest rates is usually the highest? Multiple Choice 30-year mortgage rate 20-year Treasury bond rate consumer credit-card rate prime rate of banks

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If you are LOANING money to another party, would you prefer to offer a 12% interest rate compounded quarterly or a 11.5% interest rate compounded continuously? (Hint: Compare their effective interest rates)