Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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The formula for computing interest on a note is: Principal of the notex Annual interest rate x Time expressed in fraction of year. True or False True False
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- The deferral period lasts from the original deposit date (lump sum) up until the start of the term for the annuity. True 6. Falsearrow_forwardTrue or false 1. The trend of the balance of the discount on note payable during the term of the non-interest bearing note is decreasing. 2. The note payable account will be credited at its present value upon acquisition of a property if the note issued was non-interest bearing. 3. The carrying amount of the note payable is the same all through out the term of an interest bearing note .arrow_forwardWhen the market interest rate on a short-term note receivable is greater than the stated rate, ________. Group of answer choices the present value of the note is greater than its stated value the stated value of the note is greater than its face value the stated value of the note is less than its face value the present value of the note is less than its face valuearrow_forward
- In describing investments and loans, the stated interest rate is known as the or rate. periodic or effective periodic or compounding annual or nominal annual percentage yield or effectivearrow_forwardFace value of a note payable plus interest is called Omaturity value. O face value. O proceeds. Oprincipal.arrow_forwardWrite down a formula for the outstanding principal P, after k payments, of a debt A being amortized by equal payments R over n equal periods with an interest rate i per conversion period.arrow_forward
- For compounding more frequently than annual, the effective interest rate Select one: a. equal to the nominal rate b. depends on the amount borrowed c. is lower than the nominal rate d. is higher than the nominal ratearrow_forwardin.......................all of the interest is paid at end of the term a)Amortized loan b)interest-only loan c)ordinary loan d)discount loanarrow_forwardThe maturity value of a note receivable is equal to the sum of the face amount of the note O plus the interest O plus nothing else O none of these answers are correct Ominus the interestarrow_forward
- To illustrate the preceding discussion, suppose that a father, on the day his son is born, wishes to determine what lump amount would have to be paid into an account bearing interest of 12% per year to provide withdrawals of $2,000 on each of the son’s 18th, 19th, 20th, and 21st birthdays.arrow_forwardI need help. What is the correct answer.arrow_forward
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