If the rate of inflation is 6.5%, what nominal interest rate is necessary for you to earn 3.3% real interest rate on your investment?

Q: Which is the better option if the interest rate is r=0.10 (r=10%)? Show all work used to arrive at…

A: Option 1: Receives $1000 at 10% today But if we invest the $1000 received today for 5 years

Q: rate is 0 during the entire time period, how much is the above income stream worth right now? Please…

A: Present Value of Annuity: It represents the present worth of the future annual cash flows and is…

Q: How long will it take to increase your investment by 2.5 times if the interest rate is r=0.14…

A: Future worth of the investment is the value of present or current amount in future date after adding…

Q: Can you show the steps specifically on how you got the quarterly interest rate. Instead of just the…

A: The use of rate function in excel is a prominent way to estimate accurate interest rate of a loan…

Q: The further in the future I receive any given pound amount, the higher its present value. Select…

A: Money has a time value. This means that the purchasing value of money decreases over time. Due to…

Q: ou are comparing two annuities. Annity ay $100 at the end of each month for 5 rs. Annuit B pays $100…

A: There are two types of annuities one at the beginning of period and one at the end of period.

Q: The present value of an annuity is the sum of the discounted value of all future cash flows. You…

A: An annuity's present value is the current value, discounted at a certain rate, of a series of future…

Q: What amount would have to be invested at a simple interest rate of 2.85% to grow to $2529.28 in 150…

A: we need to use simple interest formula to calculate amount of investment. A =P(1+rt) where A= amount…

Q: If there is a deflation rate of 2% and your account is earning a nominal interest rate of 1.75%,…

A: Deflation rate (d) = 2% Nominal interest rate (r) = 1.75%

Q: If the interest rate is 4%, the factor for the future value of an annuity due of 1 for n = 5,i-4% is…

A: We know that, Future value of an annuity due = P×1+in-1×(1+i)i Future value of an annuity ordinary =…

Q: Suppose that the interest rate is 8%. What is the value of the discount factor, v? V= Enter a value…

A: Given in the question is interest rate of 8%. We are required to calculate the rate and value of…

Q: What would you expect the nominal rate of interest to be if the real rate is 5 percent and the…

A: We require to compute the nominal rate of interest in this question.

Q: what is the value of $100

A: The future value of money is determined by compounding the original amount with interest. It…

Q: thanks

A: Formula for compound interest is: A = P(1+r/n)^nt Where A is the future amount, P is the principal,…

Q: a) You invest 155 000 TL for a year. At the end the year, you have 174 375 TL net in your account.…

A: We will apply the formula to calculate the real interest rate using the nominal interest rate and…

Q: Determine the present value P that must be invested to have the future value A at simple interest…

A: The PV of an investment refers to the collective worth of the future cash flows after they have been…

Q: Determine the present value P you must invest to have the future value A at simple interest rate r…

A: P = A/ (1+rt) Where, A = Future value P = Present value r =rate of interest  t = time

Q: What is the interest rate “r” if PV=$1250 and the FV=$2150 in year t=10?

A: Future value = Present value *(1+r)^n

Q: What is the equivalent effective rate of minal rate is 14.5%?

A: Nominal interest rate is interest rate without the impact of compounding but effective interest rate…

Q: Q10.4. Find the present worth sum of money that would be equivalent to the future amounts of $5000…

A: given, real rate =10% inflation rate =5% future vale = $5000 at year 6 future value =$7000 at year 8

Q: 34. An asset sells for price Po= $190 today, and people expect to be able to sell them for P₁ = $210…

A:

Q: 4. What is the effective annual interest rate i A savings account with 4% annual interest rate…

A: Details given to us are : Annual interest rate = 4% Compounding frequency = Monthly We need to…

Q: Suppose that the interest rate is 4%. What is the value of the discount factor, v? υ Enter a value…

A: An interest rate is given. We have to find the value of the discount factor and the discount rate.…

Q: Assume you have the following asset and liability in your balance sheet Asset - Bond A Modified…

A: The answer is stated below:

Q: Suppose an interest rate of 4% a) having $200 today is equivalent to having what amount in one year?…

A: (a) Interest  = 4% Present value =$200 Time = 1 year So, Amount at the end of one year =  Future…

Q: 6. Future values (S2.1) If you invest $100 at an interest rate of 15%, how much will you have at the…

A: Future value is computed by following formula-FV = A × (1+ r)nwhere,FV = future value A = Amount…

Q: What's the difference between an ordinary annuity and an annuity due? Why would you prefer to…

A: Note: Interest arate is not provided,hence "i" is taken as 5% for calculation. Same formula can be…

Q: 4. Suppose our savings account ($937.33) pays us compound interest with monthly compounding.…

A: Compounding is related to earning interest on interest. The compounding interest is more beneficial…

Q: Hi there, I am trying to figure out how to calculate interest rates. If the interest rate is 3.75%…

A: Annual interest rate (r) = 3.75% or 0.0375Number of times compounding happens per year (n) = 4 (as…

Q: Earning a 5 percent interest rate with annual compounding is better than earning a 4.95 percent…

A: False:  Annual compounding 5%  Semi Annual compounding 4.95% Assume present value 100 Then Calculate…

Q: 37. What rate of interest compounded quarterly will yield an effective interest rate of 7%?

A: The effective rate of interest is the rate under which the normal rate of interest is compounded for…

Q: A sum of 2 million is equivalent to 2.36 million one year from now. Find interest rate?

A: Given Information : Present value (PV) = $2 million Future value (FV) = $2.36 million Number of…

Q: Suppose that you invest $1,000 today at an annual rate of 11%. Assuming that the expected annual…

A: the concept we're discussing here is the effect of inflation on purchasing power and how it relates…

Q: 3.12  Suppose the spot rates of interest for investment horizons of 1 to 5 years are 4%, and for 6…

A: In the given question we require to Compute the future value of the annuity-immediate at the end of…

Q: What will the money rate of interest have to be at a 6% inflation rate to entice people to keep the…

A: given, real rate = 5% inflation= 6%

Q: f you hold the bonds for one year, and interest rates do not change, what total rate of return will…

A: The holding period return is return realized from holding the bond for that period only and all…

Q: Given: P=$1000 F=$2400 n=6 years f=8% Find the combined interest-inflation rate of return

A: GIVEN, PV = $1000 FV= $2400 N = 6 YEARS

Q: What is the interest rate “r” if PV=$100 and the FV=$350 in year t=12?

A: Present Value is the current value of a cash flow that can be occurred in future. Future value is…

Q: Find the value of P at year 0. If the interest rate is 10%. Above the line #'s are Positive Below…

A: Net Present Value is calculated by sum of all discounted future cash flows to present value. PV…

Q: ) An interest rate of 5% compounded quarterly is equivalent to what rate compounded monthly?

A: Using excel Effective and Nominal Rate function

Q: Suppose the real rate is 2.32 percent and the inflation rate is 2.68 percent. What rate (in percent)…

A: Real rate of return = 2.32% or 0.0232Inflation rate = 2.68% or 0.0268We need to calculate the…

Q: Select the correct present v. below, if the interest rate is F1=$100 and F2=$1,000.

A: Present value is the current value of a future cash flow or amount to be received in the future. to…

Q: At 7.5 percent interest, how long does it take to double your money?

A: Interest Rate = r = 7.5%Assuming,Present Value = pv = $1000Future Value = fv = 1000 * 2 = $2000

Q: How long will it take to double your investment if the interest rate is r=0.06 (r=6%)?

A: Time value of money is a concept which states that a dollar is worth more today than anytime in the…

Q: Which of the following investments that pay will $9,500 in 14 years will have a lower price today?…

A: The objective of the question is to determine which of the two investments, one earning an interest…

Interest Rate

When you deposit your money with the bank, the deposit earns you some extra money at the end of the specific period – something more than what you deposited. That amount of money that the bank pays you for keeping the money with the bank is the “interest” and the percentage at which the bank pays you for your amount is called the “interest rate”.