You have been offered an investment opportunity in which you will deposit $3,000 today and you will receive $9,000 in 12 years. What interest rate is implied by this investment?
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You have been offered an investment opportunity in which you will deposit $3,000 today and you will receive $9,000 in 12 years. What interest rate is implied by this investment?
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- (1) What is the value at the end of Year 3 of the following cash flow stream if the quoted interest rate is 10%, compounded semiannually? (2) What is the PV of the same stream? (3) Is the stream an annuity? (4) An important rule is that you should never show a nominal rate on a time line or use it in calculations unless what condition holds? (Hint: Think of annual compounding, when INOM = EFF% = IPER.) What would be wrong with your answers to parts (1) and (2) if you used the nominal rate of 10% rather than the periodic rate, INOM/2 = 10%/2 = 5%?Your brother has asked you to help him with choosing an investment. He has OMR 5000 to invest today for a period of two years. You identify a bank CD that pays an interest rate of 4.25 percent with the interest being paid quarterly. What will be the value of the investment in two years? Select one: O a. 5107 OMR O b. None of these Oc. 5441 OMR O d. 5341 OMRGive typing answer with explanation and conclusion Find the interest rate (or rates of return) in each of the following situations. Do not round intermediate calculations. Round your answers to the nearest whole number. You borrow $740 and promise to pay back $814 at the end of 1 year. % You lend $740 and receive a promise to be paid $814 at the end of 1 year. % You borrow $60,000 and promise to pay back $171,156 at the end of 8 years. % You borrow $11,000 and promise to make payments of $3,359.50 at the end of each of the next 5 years. %
- Your brother has asked you to help him with choosing an investment. He has OMR 5000 to invest today for a period of two years. You identify a bank CD that pays an interest rate of 4.25 percent with the interest being paid quarterly. What will be the value of the investment in two years? Select one: O a. 5107 OMR O b. None of these O c. 5441 OMR O d. 5341 OMRIf you deposit OMR 5000 in your account in a bank; if your bank pays 9.05% interest, how much will you get in 15 years? Find future value Select one: a. None of the option b. 18212.41 c. 18833.31 d. 18212.14 e. 18338.13An investor is considering the purchase of a financial instrument that promises to make the following payments: Promised Payment by Issuer $100 $100 $100 $100 $1,100 Years from Now 1 2 3 4 5 This financial instrument is selling for $1,243.83. Assume that the investor wants a 6.25% annual interest rate on this investment. Should the investor purchase this investment? OA. Yes, the financial instrument is attractive O B. No, the financial instrument is unattractive. C. Can't be answered. More information is needed to answer the question D. Indifferent.
- You have RM 5,000.00 you want to invest for the next 45 years until retirement. You are offered an investment plan that will pay you 6 percent per year for the next 15 years and 10 percent per year for the last 30 years.a) Explain the time value of money principleb) Identify the underlying assumption of the time value of money principlec) Draw a graph that illustrates the relationship between interest rates and the present value of RM 1,000.00 to be received in one year.d) Suggest how you can minimize the amount of cash you must invest in order to reach your retirement goal.e) Compute the amount you will have at the end of the 45 years.f) Calculate the amount you would have if the investment plan pays 10 percent for the first 15 years and 6 percent per year for the next 30 years.May I ask for an explanation and solution to the question for a better understanding. Thank you! An investor puts P200 in a money market account TODAY that returns 3% with monthly compounding. The investor plans to keep his money in the account for 2 years. What is the future value of his investment when he closes the account two years from today? a. P212.18 b. P201.00 c. P212.35 d. P406.56What is the no arbitrage price of a risk-free investment that promises to pay $1,000 in one year? The risk-free interest rate is 3.5%. If you can purchase the investment for $950, do you have an arbitrage opportunity?
- Q) You will deposit 14,061 at 10% compound interest for 6 years, and then move the amount you would receive to an investment account at 14 % simple interest for another 3 years. How much money would you have at the end of the entire period? use formula and solve.not use excel. clear handwriteingIf the rate of interest that your investment can earn on a 2-year investment is zero, which of the following statements is NOT CORRECT? * a. All of the statements are correct. b. The payment for the use of your money for two years is zero. c. The future value of your investment is higher than your present value at the end of the investment period. d. You will receive the same amount you invested at the beginning of the 2-year period at the conclusion or maturity of the investment.(2.1) Please provide step by step explaination You are offered an investment which will cost you $100,000 and will result in a guaranteed return of $108,000 in one year. Your bank offers a government-guaranteed deposit with an interest rate of 7% p.a. Based on this information only, would you accept this investment? Select one: a. Yes b. No c. Don't know