Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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QUESTION 9 Six Ltd purchased a new machine for R500 000 on 01 January 2019 by borrowing money from the bank. Itthe bank charges interest at 12% per annum compounded monthly and Six Ltd is required to make equal monthly repayments in arrears over 4 years commencing on 31 January 2019, how much will each instalment be? Which of the following options represents the missing variable? OAVYR ● B.PMT OC.FV OD.PV OEN QUESTION 10 Six Ltd purchased a new machine for R500 000 on 01 January 2019 by borrowing money from the bank. If the bank charges interest at 12% per annum compounded monthly and Six Ltd is required to make equal monthly repayments in arrears over 4 years commencing on 31 January 2019. How much will each installment be? ⒸAR2 871.06 OBR13 166.92
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Transcribed Image Text:QUESTION 9 Six Ltd purchased a new machine for R500 000 on 01 January 2019 by borrowing money from the bank. Itthe bank charges interest at 12% per annum compounded monthly and Six Ltd is required to make equal monthly repayments in arrears over 4 years commencing on 31 January 2019, how much will each instalment be? Which of the following options represents the missing variable? OAVYR ● B.PMT OC.FV OD.PV OEN QUESTION 10 Six Ltd purchased a new machine for R500 000 on 01 January 2019 by borrowing money from the bank. If the bank charges interest at 12% per annum compounded monthly and Six Ltd is required to make equal monthly repayments in arrears over 4 years commencing on 31 January 2019. How much will each installment be? ⒸAR2 871.06 OBR13 166.92
QUESTION 11 You are evaluating two annuities. They are identical in every way, except that one is an ordinary annuity arid one is an annuity due. Which of the following statements is/are true? Select ALL that apply. DA. The ordinary annuity must have a lower future value than the annuity due B. The annuity due must have the same present value as the ordinary annuity C. The annuity due and the ordinary annuity will make the same number of total payments over time OD. The two annuities will differ in present value by the amount (1+r) E. The ordinary annuity must have a lower present value than the annuity due QUESTION 12 Calculate the effective annual interest rate of 9% per annum compounded daily Round your answer to 2 decimal places and DO NOT include the percentage (%) sign. Express your answer as X.XX. 9,06
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Transcribed Image Text:QUESTION 11 You are evaluating two annuities. They are identical in every way, except that one is an ordinary annuity arid one is an annuity due. Which of the following statements is/are true? Select ALL that apply. DA. The ordinary annuity must have a lower future value than the annuity due B. The annuity due must have the same present value as the ordinary annuity C. The annuity due and the ordinary annuity will make the same number of total payments over time OD. The two annuities will differ in present value by the amount (1+r) E. The ordinary annuity must have a lower present value than the annuity due QUESTION 12 Calculate the effective annual interest rate of 9% per annum compounded daily Round your answer to 2 decimal places and DO NOT include the percentage (%) sign. Express your answer as X.XX. 9,06
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Step 1: Explain the future value
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Step 2: Calculate the value of each instalment
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Step 3: Computation of Future value using annuity due and ordinary annuity
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Step 4: Calculate the effective interest rate
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