a. For an interest rate of 18% per year compounded continuously, calculatethe effective monthly and annual interest rates.b. An investor requires an effective return of at least 15%. What is the minimum annual nominal rate that is acceptable for continuous compounding?
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a. For an interest rate of 18% per year compounded continuously, calculate
the effective monthly and annual interest rates.
b. An investor requires an effective return of at least 15%. What is the minimum annual nominal rate that is acceptable for continuous compounding?
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- Suppose that an investment promises to pay a nominal 9.6 percent annual rate ofinterest. What is the effective annual interest rate on this investment assuming thatinterest is compounded (a) annually? (b) semiannually? (c) quarterly? (d) monthly? (e)daily (365 days)? (f) Weekly?suppose that an investment promises to pay a real 9% annual rate of interest and inflation rate is 3%. What is the effective annual interest rate on this investment assuming that interest is compounded quarterly? Note: Please show how you compute each of the items.Suppose that an investment promises to pay a real 9% annual rate of interest and inflation rate is 3%. What is the effective annual interest rate on this investment assuming that interest is compounded quarterly? PLEASE SHOW HOW YOU COMPUTE EACH OF THE ITEMS.
- ou can assume that all payments are made at the beginning of the period and use "1" for the "type" argument in the formula. A. Suppose you invest $ 11,400 today. What is the future value of the investment in 29 years, if interest at 7% is compounded annually? B B. Suppose you invest $ 11,400 today. What is the future value of the investment in 29 years, if interest at 7% is compounded quarterly? 4 5 6 27 28 29 C. Suppose you invest St $ 570 monthly. What is the future value of the investment in 29 years, if interest at 5% is compounded monthly? Question 1 Question 2 + Ready Accessibility: Investigate MAR 17 A W +Estimate the annual percent rate for the add on loan Using the given number of payments and annual interest-rate. Use the formula APR = 2nr/n+1 N= 48; R= 8% APR=???Assume that at time 0 a sum L is lent for a series of n yearly payments. The rth payment, of amount xr, is due at the end of the rth year. Let the effective annual interest rate for the rth year be ir. Give an identity which expresses L in terms of the xr and ir.
- What is the value of the continuously compounded nominal interest rate r if the present value of 104 to be recieved after one year is the same as the present value of 110 to be received after two years? Please solve by hand and show all the steps of answer in order me to understand it at best :)Suppose that an investment promises to pay a nominal 9.6 percent annual rate of interest. What is the effective annual interest rate on this investment assuming that interest is compounded (a) annually? (b) semiannually? (c) quarterly? (d) monthly? (e) daily (365 days)? (f ) continuously? (Note: Report your answers accurate to four decimal places –e.g., 0.0987 or 9.87%.)Suppose you have a loan of amount P, and you plan to pay off the debt in10 equal annual installments. Suppose the annual compounding rate is r. What is thepresent (t = 0) value of the 7th installment? (Express your answer in terms of thevariables in the problem P and r and simplify your answer.)
- 6. You are offered an investment with a quoted annual interest rate of 13% with quarterly compounding of interest. What is your effective annual interest rate?Consider a future value of $2,000, 8 years in the future. Assume that the nominal interest rate is 18.00%. Assume that there is semiannual compounding. Entering PMT=0 and a FV=$2,000 into a financial calculator, along with the appropriate periodic interest rate and value of N, yields a present value of approximately $ with semiannual compounding. Assume that there is quarterly compounding. Entering PMT=0 and a FV=$2,000 into a financial calculator, along with the appropriate periodic interest rate and value of N, yields a present value of approximately $ with quarterly compounding. Suppose now that the cash flow of $2,000 occurs only 1 year in the future. Assume that there is monthly compounding. Entering PMT=0 and a FV=$2,000 into a financial calculator, along with the appropriate periodic interest rate and value of N, yields a present value of approximately $ with monthly compounding.An investment pays you 9% interest, compounded quarterly. What is the periodic rate of interest? What is the nominal rate of interest? What is the effective rate of interest?