For each of the following cases, indicate (a) to what rate columns, and (b) to what number of periods you would refer in looking up the interest factor. 1. In a future value of 1 table: Annual Rate Number of Years Invested Compounded (a) Rate of Interest a. 9% 12 Annually b. 8% 7 Quarterly C. 12% 16 Semiannually % % % (b) Number of Periods 2. In a present value of an annuity of 1 table: (Round "Rate of Interest" answers to 1 decimal place, e.g. 4.5% and other answers to O decimal places, eg 45.) Annual Rate Number of Years Invested Number of Rents Involved Frequency of Rents (a) Rate of Interest (b) Number of Periods a. 10% 28 28 Annually % b. 10% 15 30 Semiannually % C. 8% 7 28 Quarterly %

For each of the following cases, indicate (a) to what rate columns, and (b) to what number of periods you would refer in looking up the interest factor. 1. In a future value of 1 table: Annual Rate Number of Years Invested Compounded (a) Rate of Interest a. 9% 12 Annually b. 8% 7 Quarterly C. 12% 16 Semiannually % % % (b) Number of Periods 2. In a present value of an annuity of 1 table: (Round "Rate of Interest" answers to 1 decimal place, e.g. 4.5% and other answers to O decimal places, eg 45.) Annual Rate Number of Years Invested Number of Rents Involved Frequency of Rents (a) Rate of Interest (b) Number of Periods a. 10% 28 28 Annually % b. 10% 15 30 Semiannually % C. 8% 7 28 Quarterly %

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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For each of the following cases, indicate (a) to what rate columns, and (b) to what number of periods you would refer in looking up the interest factor.1. In a future value of 1 table: Annual Rate Number of Years Invested Compounded (a) Rate of Interest (b) Number of Periods a. 11% 10 Annually enter percentages % enter the number of periods b. 8% 8 Quarterly enter percentages % enter the number of periods c. 10% 19 Semiannually enter percentages % enter the number of periods 2. In a present value of an annuity of 1 table: (Round answers to 1 decimal place, e.g. 458,58.1.) Annual Rate Number of Years Invested Number of Rents Involved Frequency of Rents (a) Rate of Interest (b) Number of Periods a. 12% 30 30 Annually enter percentages % enter the number of periods b. 11% 16 32 Semiannually enter percentages % enter the number…
For each of the following cases, indicate (a) to what interest rate columns and (b) to what number of periods you would refer in looking up the future value factor. (Round percentages to 2 decimal places, e.g. 5,275.)(1) In Table 1 (future value of 1): Annual Rate Number ofYears Invested Compounded Case A 4% 3 Annually Case B 9% 5 Semiannually (a) (b) Case A % periods Case B % periods (2) In Table 2 (future value of an annuity of 1): Annual Rate Number ofYears Invested Compounded Case A 6% 5 Annually Case B 12% 6 Semiannually (a) (b) Case A % periods Case B % periods
For each of the following cases, indicate (a) to what rate columns, and (b) to what number of periods you would refer in looking up the interest factor. 1. In a future value of 1 table: a. b. C. mpt in progress a. b. C. Annual Rate 10% 8% 10% Annual Rate 10% 11% 12% Number of Years Invested Number of Years Invested 26 16 7 11 6 2. In a present value of an annuity of 1 table: (Round "Rate of Interest" answers to 1 decimal place, e.g. 4.5% and other answers to O decimal places, e.g 45.) 18 Number of Rents Involved 26 32 Compounded 28 Annually Quarterly Semiannually Frequency of Rents Annually Semiannually (a) Rate of Interest Quarterly % (a) Rate of Interest % % % % (b) Number of Periods % (b) Number of Periods
For each of the following cases, indicate (a) to what rate columns, and (b) to what number of periods you would refer in looking up the interest factor. 1. In a future value of 1 table: a. b. C. a. b. Annual Rate C. 10% 12% 12% Annual Rate 12% 12% 8% Number of Years Invested Number of Years Invested 26 16 7 12 6 2. In a present value of an annuity of 1 table: (Round "Rate of Interest" answers to 1 decimal place, e.g. 4.5% and other answers to O decimal places, e.g 45.) 20 Number of Rents Involved 26 32 Compounded 28 Annually Quarterly Semiannually Frequency of Rents Annually Semiannually (a) Rate of Interest Quarterly % (a) Rate of Interest % % % % (b) Number of Periods % (b) Number of Periods
For each of the following cases, indicate (a) to what rate columns, and (b) to what number of periods you would refer in looking up the interest factor. 1. In a future value of 1 table: a. b. C. a. b. Annual Rate C. 11% 12% 12% Annual Rate 10% 11% 12% Number of Years Invested Number of Years Invested 25 14 6 11 7 2. In a present value of an annuity of 1 table: (Round "Rate of Interest" answers to 1 decimal place, e.g. 4.5% and other answers to O decimal places, e.g 45.) 19 Number of Rents Involved 25 28 Compounded 24 Annually Quarterly Semiannually Frequency of Rents Annually Semiannually (a) Rate of Interest Quarterly % (a) Rate of Interest % % % % de (b) Number of Periods % (b) Number of Periods
For each of the following cases, indicate (a) to what rate columns, and (b) to what number of periods you would refer in looking up the interest factor. 1. In a future value of 1 table: a. b. J C. a. b. Annual Rate C. 10% 8% 10% Annual Rate 9% 11% Number of Years Invested 12% 2. In a present value of an annuity of 1 table: (Round answers to 1 decimal place, e.g. 458,58.1.) Number of Rents Involved Number of Years Invested 29 16 10 7 7 20 29 32 Compounded 28 Annually Quarterly Semiannually Frequency of Rents Annually Semiannually (a) Rate of Interest Quarterly (a) Rate of Interest % % % % % % (b) Number of Periods (b) Number of Periods
For each of the following cases, indicate (a) to what interest rate columns and (b) what number of periods you would refer to in looking up the future value factor. (1) In Table 1 (future value of 1): \table||,Annual Rate, \table[[Number of], [Years Invested]], Compounded], [Case A,5%,5, Annually], [Case 8,8%, 4, Semiannually]]\ table[(a)..(b)], [Case A,%, periods,], [Case B,%, periods,,]] (2) In Table 2 (future value of an annuity of 1): \ table[],Annual Rate,\table[[Number of], [Years Invested]], Compounded], [Case A,4%, 12, Annually), (Case B,6%, 5,Semiannually]] \table[[,(a), (b)].[..%,periods], [Case A,%, periods,]]
For each of the following cases, indicate (a) to what rate columns, and (b) to what number of periods you would refer in looking up the interest factor.1. In a future value of 1 table: Annual Rate Number of Years Invested Compounded (a) Rate of Interest (b) Number of Periods a. 11% 10 Annually % b. 8% 8 Quarterly % c. 10% 19 Semiannually % 2. In a present value of an annuity of 1 table: (Round answers to 1 decimal place, e.g. 458,58.1.) Annual Rate Number of Years Invested Number of Rents Involved Frequency of Rents (a) Rate of Interest (b) Number of Periods a. 12% 30 30 Annually % b. 11% 16 32 Semiannually % c. 12% 8 32 Quarterly %
Find the following: a. interest rate per conversion period b. future amount c. compound interest d. conversion period per year e. total number of conversion period
The n-year spot rate of interest, in, can be represented by: = 0.08 0.06 x exp(-0.1n) - Calculate, to 4 decimal places (in percentages), the 3-year forward rate at time 3, f 3,3-
An interest rate obtained by dividing the nominal rate per year by the number of compounding periods in that year isa. A nominal interest rateb. An effective interest ratec. An effective interest rate only if the compounding period is monthlyd. Either (b) or (c)
Assume that you must estimate what the future value will be two years from today using the future value of 1 table. (PV of $1, EV of $1. PVA of $1, and FVA of $1) Which interest rate column and number-of-periods row do you use when working with the following rates? (Round percentage answers to 2 decimal places.) Answer is complete but not entirely correct. Number of Periods 1. 12% annual rate, compounded annually 2.8% annual rate, compounded semiannually 3. 12% annual rate, compounded quarterly 4. 12% annual rate, compounded monthly Interest Rate 12.00 2.00 3.00 1.00 % % % % 2 80 24

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