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- Answer the following Compound Interest problem using the provided formula ONLY. Show your complete solution. 10. Compound Interest An investment of P3M earns interest of 9% compounded continuously. What is the effective rate of interest?If you make an innvestment of $5000 and the investment earns a continuous annual interest rate of 7.3%, how much will the investment be worth in 16 yean? The investment will be worth S (Round to the nearest cent as needed)Consider an investment which pays 1.05 times your original payment (which is not returned) after two months. Find the annualised rate of return of this investment. Your answer should be a percentage, but do not enter the 9% sign. For example, it your answer is 75, enter 75. Answer:
- What is the equivalent uniform annual payment for the following investment if the interest rate is 10%? Populate the following table and compute the uniform annual payment. Show all work and provide a comment. [Hint: This problem is a mix of annuity, gradient, and a single future cash payment] ΕΟΥ Cash Flows 1 $4,000 2 $4,500 3 $5,000 4 $5,500 5 $6,000 60 $6,500 7 $7,000 00 8 $7,500 9 $8,000 10 $15,500 Annuity Gradient FutureAn investment earns an annual interest rate of 12 percent compounded Semi annually. What is the effective annual rate? Use excel.An interest rate is 12% APR when measured using semiannual compounding. What is the equivalent rate when measured using continuous compounding? How much will $100 grow to in 3 years if it's invested at 12% APR with semiannual compounding? Is that more, less, or the same as it will grow to over the same period using the continuously compounding equivalent rate? Group of answer choices 11.33%; $140.49; same 11.33%; 140.49; less 11.65%; $141.85; same 11.65%; 141.85; less
- Find the PV and FV of an investment that makes the following end-of-year payments. The interest rate is 8%. Year Payment 1 100 2 200 3 400 Rate = 8% To find the PV, use the NPV function: PV = Year Payment x (1 + I )^(N-t) = FV1 100 1.17 116.64 2 200 1.08 216.00 3 400 1.00 400.00 Sum = ?PV = ?FV of PV = ?Your client is invested in a registered indexed-linked annuity (RILA). The RILA contains a 7% floor, an 80% participation rate, and an overall cap rate of 10%. Suppose in years one and two, the S&P 500 returns 12% and -10%, respectively. What interest rate would be credited to the RILA during these two years? A) Year 1: 10% / Year 2: -7% B) Year 1: 9.6% / Year 2: -7% C) Year 1: 9.6% / Year 2: -3% D) Year 1: 9.6% / Year 2: -10%The formula for continuous compound interest is A=Pe sqrt rt. How long did it take for an initial investment of $10,000 to grow to $12,000 at 2.6% annual interest? 
- 4. Without calculating, explain which investment is better and why for a principal investment of $100: an investment offering a 5% simple interest rate vs. a 5% rate that is compounded monthly.Compute the PV of a perpetuity with monthly payments of $1,000, given an annual discount rate of 4% and a constant annual growth rate in the payment stream of 2% ?You make an investment into a money market account at time T=0. In year T=5, the value of the money market account will be $5,000. The money market account pays an annual interest of R=6%, and interest is compounded on a quarterly basis. What is the present value of this account?