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- Suppose there is a positive CF at the end of Year 2054 in the amount of $813. What would be the equivalent value of this CF at the end of Year 2019 at an interest rate of 4.1%?Assume that the one-year rate (short-term) over the next 3 years are 2023: 4% 2024: 5% 2025: 6% (1) Use the expectations theory to calculate the two-year rate (long-term) and the three-year rate (long-term). (2) Draw a yield curve.What is the future worth of $1,000 in month 1, $1,040 in month 2, and amounts increasing by $40 per month through month 12, at the end of year 2 if the interest rate is 23.7631528% per year, compounded continuously?
- Suppose that at the end of 2021 the one-year interest rate was 9.75% and the two-year interest rate was 10.5%. How can this yield curve be interpreted? Calculate the expected short-term interest rate at the end of 2022.Calculate the future value if present value (PV) = $1,020, interest rate (r) = 11.9% and number of years (t) = 15Find the maturity value if P25,000 is invested from October 15, 2016 to December 15, 2017 at a simple interest rate of 14%?
- TERM STRUCTURE Using Pure Expectations theory to predict future rates: I ■ Suppose: 1¹₁= 1%, 1¹₂= 2%, 113= 3% What does that imply about the 1-year forward rate in 2 years (f₁), and the 2-year forward rate in 1 year (₂f₂)?6. Find the maturity value if Php 70,000 is invested from August 18, 2019 to November 18, 2020mat a simple interest of 14 ½ %?(a) Calculate the perpetual equivalent annual worth in future dollars for years 1 through ∞ for income of $50,000 now and $5000 per year thereafter. Assume the market interest rate is 8% per year and inflation averages 4% per year. All amounts are quoted as future dollars. (b) If the amounts had been quoted in CV dollars, what is the annual worth in future dollars?
- If $43,000 is invested now, which of the following value is closest to the equivalent future dollars 6 years from now to earn a real interest rate of 3% per year when the inflation rate is 6% per year? Select one: а. 51,344 b. 72,833 c. 66,709 d. 79,519 е. 60,996At what interest rate compounded quarterly will an investment of P2000 double in amount after 5 years? Select the correct response: O 20.05%pa cmpd quarterly O 15.45%pa cmpd quarterly O 14.35% pa cmpd quarterly 14.11% pa cmpd quarterly 12.68%pa cmpd quarterlyIf the Nominal (APR) rate of return for an investment is 10.15% compounded quarterly, what is the Effective Annual Rate of return (EAR or EFF)?