a. If the one-year discount factor is 0.9217, what is the one-year interest rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) b. If the two-year interest rate is 8.5%, what is the two-year discount factor? (Do not round intermediate calculations. Round your answer to 4 decimal places.) c. Given these one- and two-year discount factors, calculate the two-year annuity factor. (Do not round intermediate calculations. Round your answer to 4 decimal places.) d. If the PV of $10 a year for three years is $25.54, what is the three-year annuity factor? (Do not round intermediate calculations. Round your answer to 4 decimal places.) e. From your answers to (c) and (d), calculate the three-year discount factor. (Do not round intermediate calculations. Round your answer to 4 decimal places.)
a. If the one-year discount factor is 0.9217, what is the one-year interest rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) b. If the two-year interest rate is 8.5%, what is the two-year discount factor? (Do not round intermediate calculations. Round your answer to 4 decimal places.) c. Given these one- and two-year discount factors, calculate the two-year annuity factor. (Do not round intermediate calculations. Round your answer to 4 decimal places.) d. If the PV of $10 a year for three years is $25.54, what is the three-year annuity factor? (Do not round intermediate calculations. Round your answer to 4 decimal places.) e. From your answers to (c) and (d), calculate the three-year discount factor. (Do not round intermediate calculations. Round your answer to 4 decimal places.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:a. If the one-year discount factor is 0.9217, what is the one-year interest rate? (Do not round intermediate calculations. Enter your
answer as a percent rounded to 2 decimal places.)
b. If the two-year interest rate is 8.5%, what is the two-year discount factor? (Do not round intermediate calculations. Round your
answer to 4 decimal places.)
c. Given these one- and two-year discount factors, calculate the two-year annuity factor. (Do not round intermediate calculations.
Round your answer to 4 decimal places.)
d. If the PV of $10 a year for three years is $25.54, what is the three-year annuity factor? (Do not round intermediate calculations.
Round your answer to 4 decimal places.)
e. From your answers to (c) and (d), calculate the three-year discount factor. (Do not round intermediate calculations. Round your
answer to 4 decimal places.)
a.
Interest rate
%
b.
Discount factor
c. Annuity factor
d. Annuity factor
e. Discount factor
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