a) DEFINE the following terminologies: i. Present value ii. Future value iii. Period iv. Interest rate

Q: Required: a. Determine the discounted rate of return.

A: Formula: Discount rate= Lower Rate +Lower NPV×Higher Rate-Lower RateLower NPV-Higher NPV

Q: Define the structure of interest rates and list two theories used to explain the structure.

A: Introduction Structure of interest rates: The yield curve, or term structure of interest rates,…

Q: Define term structure of interest rates

A: The term structure of interest rates generally alluded to as the yield curve, portrays the coupon…

Q: What the different between rate interest و interest value ؟؟!!

A: The rate interest indicates the cost of borrowing or earnings on deposit in the percentage of the…

Q: Define Times interest earned ratio.

A: Accounting Ratios: A ratio is a number expressed in terms of anther. Ratios are used by…

Q: The formula in getting the compound interest given the present value and maturity value is…

A: Compound interest : Compound interest can be understood as the transfer of interest, or, in specific…

Q: For the following interest rate and cash flows what are the NPV and EAUC? Please use excel to answer…

A: We need to compute NPV (Net present value) and EUAC (Equivalent uniform annual cost) using excel.

Q: Present using the rate of return method (ROR) with the formula. If the NPV is used to determine the…

A: Here, Net Cash Flow is  31250 Rate of Interest is 10% Initial Investment is 100000 NPV is 18462…

Q: How to calculate Present Value Interest Factors?

A: PVIF is known as Present Value Interest Factor. PVIF refers to a factor that is very useful in…

Q: Identify the MARR (or external interest rate)?

A: A minimum acceptable rate of return (MARR) is the all-out advantage that a speculator wants to pick…

Q: How to Calculate Compound Interest Factors and explain with example?

A: It is interest ascertained based on the starting principal and frequently contains all the collected…

Q: Write the methods of Calculating Interest?

A: Methods of calculating interest: The basic and fundamental methods for calculating interests are…

Q: Define risk-free nominal interest rate of interest

A: Risk free rate is the minimum rate that the investor may expect to receive from their investment…

Q: What is the name principal future value a. b. Ob

A: Annuity refers to a series of payments  that are made at equal intervals of time.They can be…

Q: Please explain the difference between the terms interest rate and required return by defining each.

A: The amount which is charged by the lender to the borrower in order the use assets is known as the…

Q: 29.The calculations of a discount rate can be based on all the following approaches among others…

A:

Q: Define each of the following terms:j. Real risk-free rate of interest, r*; nominal risk-free rate of…

A: Real risk-free rate of interest: The risk-free rate signifies the interest a saver might expect from…

Q: Calulate the effective interest rate.

A: Here, Value of Note is $29,059 Simple Interest Rate is 8% Time Duration of Note is 12 months

Q: What are the components of an interest rate?

A: Interest rate refers to the net charges that a lender makes on the principal amount provided to the…

Q: a. Explain the expectations theory of the term structure of interest rates. b. What do the shapes of…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: How is Compound Interest calculated?

A: Compound interest refers to the addition of interest amount to the principal. The concept of…

Q: Describe the process of using the risk-adjusted discount rateto calculate the net present value?

A: Net present value (NPV) is the excess of present value of cash inflows over the present value of…

Q: Give an example assuming that  the Compounding Period equals to Payment Period?

A: The representation on the basis of assumption:

Q: Interest cost is calculated by multiplying the______by the ______?

A: Interest cost is calculated by multiplying the  Principle amount by one plus the annual interest…

Q: clearly distinguish between norminal interest rate and effective interest rate

A: The term interest rate can be defined as the fixed income received on the investment. . There are…

Q: What do you think about the interest rate i for

A: A recession refers to the time period which is affected by a temporary economic decline during which…

Q: Define each of the following terms:m. Term structure of interest rates; yield curve

A: Term structure of interest rates: Term structure of interest rates is defined as the association…

Q: a) Define effective interest rates and prove that r = 1+ -1.

A: The effective rate of interest is the equivalent annual ROI which is compounded annually. Effective…

Q: Explain risk-free nominal rate of interest rate

A: This is the raw rate of return which does not take inflation into consideration. This is the rate…

Q: Distinguish between the initial rate of interest and the expected yield on an ARM. What is the…

A: Introduction: The adjustable rate mortgage is one of the method used to calculate the interest rate…

Q: Explain the prime interest rate.

A: Interest are generally charged on the loans. Borrowers are needed to pay the interest to the person…

Q: Define each of the following terms:l. Interest rate risk; maturity risk premium (MRP); reinvestment…

A: Interest rate risk: Interest rate risk is the chance of a decay in the worth of an asset resultant…

Q: How can we identify the MARR (or external interest rate)?

A: The minimum profit expected by an investor from an investment after considering all the risks and…

Q: How is the PW analysis dependent on the rate of interest used for the PW computation?

A: Net present value (or) PW analysis is one of the capital budgeting techniques. When a company is…

Q: Illustrate the methods of calculating Interest?

A: Traditionally, there are two methods of calculating interest : 1. Simple interest rate method 2.…

Q: ket interest r

A: Introduction : As the name suggests, market interest rates refers to the interest rate that the…

Q: Describe the methods of calculating interest?

A: In the finance industry, every decision revolves around the interest rate. This is a crucial…

Q: Distinguish between the real risk-free rate of interest, r*, and the nominal, or quoted,risk-free…

A: The interest rate is the cost of carry some loan or money. It will provide the income to the lender…

Q: Define each term and state three characteristics for each term a- Pay-back period b- Discounted…

A: a. Pay-back period: The payback period is the length of time required to repay the cost of an…

Q: How is NPW used as a Function of Interest Rate?

A: Present value computes the existing value of future benefits by discounting future worth with a…

Q: "Fisher effect defines the relationship between nominal rates, real rates, infiation, default…

A: Fischer effect:- It is an important concept of economics that describes the releationship between…