Consider the following investments : (1) $1,000 invested at 10% per annum with monthly compounding. (2) $1,000 invested at 9.5% per annum with daily compounding. (3) $1,000 invested at 9% per annum with continuous compounding. (a) Which investment would you choose?
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Consider the following investments : (1) $1,000 invested at 10% per annum with monthly compounding. (2) $1,000 invested at 9.5% per annum with daily compounding. (3) $1,000 invested at 9% per annum with continuous compounding. (a) Which investment would you choose?
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- To calculate the effective rate of return on an investment, the total compound interest earned in 1 year is divided by the _____.Consider an initial investment of $100 using an accumulation function which is a second-degree polynomial. You are given that the future values of this investment at the end of six months and the first year are $120 and $150, respectively. Determine the present value of 100$ which is paid at time -15.Assume that at the beginning of the year, you purchase an investment for $6,300 that pays $130 annual income. Also assume the investment's value has increased to $6,900 by the end of the year. a. What is the rate of return for this investment? Note: Input the amount as a positive value. Enter your answer as a percent rounded to 2 decimal places. Rate of return % b. Is the rate of return a positive or a negative number? Positive Negative
- An investment of $74,000 yields a net annual income of $22,000 for 6 years. What is the internal rate of return (IRR) for this investment? O a. 19.54% O b. 24.43% O c. 13.03% O d. 29.31% O e. 15.63%1. The return of an investment is given in the following table: Year Balance RM5000 1 RM5375 RM5697.50 3. RM5925.40 (a) Find the effective rate of interest for each of the three years. (b) Find the equivalent level effective rate of return over the three-year period. (c) If a principal of RM7000 is invested at time t = 0, calculate the balance of the investment after 3 years.Assume that at the beginning of the year, you purchase an investment for $6,500 that pays $95 annual income. Also assume the investment's value has increased to $7,050 by the end of the year. a. What is the rate of return for this investment? Note: Input the amount as a positive value. Enter your answer as a percent rounded to 2 decimal places.
- An investment pays $200 at the end of Year I. $250 at the beginning* of Year 2. $387 at the end of Year 4. and $500 at the beginning of Year 6. If other investments of equal Mk earn 7.5% annually. what will be this investments present value and future value?19. Find the Macaulay and Modified durations of an investment that pays $2,000 at the end of year 2 and $3,000 at the end of year 5. Assume a level annual effective interest rate of i = 3%. Be sure to use the correct units for each answer.Assume that at the beginning of the year, you purchase an investment for $7,200 that pays $100 annual income. Also assume the investment's value has decreased to $6,800 by the end of the year. (a) What is the rate of return for this investment? (Input the amount as a positive value. Enter your answer as a percent rounded to 2 decimal places.) Rate of return % (b) Is the rate of return a positive or negative number? Positive O Negative
- What is the simple payback period (in years) for an investment of $465,000 if the net annual income is $75,000? O a.7 O b.8 O c. 5 O d. 9 O e. 61. The return of an investment is given in the following table: Year Balance RM5000 1 RM5375 2 RM5697.50 RM5925.40 (a) Find the effective rate of interest for each of the three years. (b) Find the equivalent level effective rate of return over the three-year period. If a principal of RM7000 is invested at time t = 0, calculate the balance of the (c) investment after 3 years.You invest $94.1, and your investment account shows $107.9 at the end of year one, $97.9 at the end of year two, and $107.1 at the end of year three. Calculate the Annual Holding Period Return (HPR) over the full period.