Simple interest of i= 4% is being credited to a fund. In which period, n, is this equivalent to an effective rate of 2.5%?

j.   Find the PV and the FV of an investment that makes the following end-of-year payments.  The              interest rate is 8%. Year 1 $100, Year 2 $200, Year 3 $400           Year   Payment       1   100       2   200       3   400                     Rate 8%                   To find the PV, use the NPV function: Pv= $581.59                   Year Payment x (1+ I)^(N- t) = FV 1 100         2 200         3 400

Consider two assets with the following cash flow streams:   Asset A generates $4 at t=1, $3 at t=2, and $10 at t=3. Asset B generates $2 at t=1, $X at t=2, and $10 at t=3.   Suppose X=6 and the interest rate r is constant.   For r=0.1, calculate the present value of the two assets. Determine the set of all interest rates {r} such that asset A is more valuable than asset Draw the present value of the assets as a function of the interest rate. Suppose r=0.2. Find the value X such that the present value of asset B is 12. Suppose the (one-period) interest rates are variable and given as follows: r01=0.1,r12=0.2, r23=0.3. Calculate the yield to maturity of asset A. (You can use Excel or ascientific calculator to find the solution numerically.)

3.  If a capital investment is $28,752.7 and equal annual cash inflows are 69,943.5, state the internal rate of return factor rounded to two decimal places.

Assume that at time 0 a sum L is lent for a series of n yearly payments. The rth payment, of amount xr, is due at the end of the rth year. Let the effective annual interest rate for the rth year be ir. Give an identity which expresses L in terms of the xr and ir.

Use the compound interest formula A = P(1 + i)n to find the indicated values A = $6,000; i = 0.03; n = 24; P =?

Find the effective yield on a discount loan with the given discount rate r and the time. (Round your answer to two decimal places.) r = 2%, 2 months

20. What is X in the formula: FV = X(1+r) ? Select one: a. The future value of an annuity with X cash flows b. The present value of a single cash flow in one period's time c. The future value of a single cash flow in one period's time d. The present value of an annuity with X cash flows

Example 26a (Varying Force of Interest) A fund earns interest at a force of interest 8, = kt . A deposit of RM100 at time t=0 will grow to RM250 at the end of 5 years. Determine k.

The of the present values of all the payments required to pay off a loan is equal to the original principal of the loan. square root sum economic rate equivalent payment