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%?

Q: Find the effective rate of  interest if the nominal rate is 12 % compounded bi - monhtly.

A: Annual Nominal interest rate = 0.12 Number of compounding in a year (n) = 6 (i.e. 12 months / 2)  Bi…

Q: Estimate the annual percent rate for the add on loan Using the given number of payments and annual…

A: As per the information provided:  N = 48 R = 8% To determine: We have to estimate the annual…

Q: General Annuity. Find P if C=₱20,000, r=2.5%, t=2, m=4,k=12.

A: C is P20,000 r=2.5% t=2 m=4 K=12   To Find: P Note:- As abbreviation for C,r,t,m,k and P is not…

Q: Year 1 2 3 4 Cash Flow $800 1,010 1,280 1,180

A: Present value is the equivalent value based on the time value of money of the future cash flow that…

Q: A financial analyst considers three funds. The funds' estimated returns depend on future economic…

A: OUTCOME PROBABILITY FUND M FUND N FUND P A 10.00% -10.00% -25.00% 10.00% B 30.00% 8.00% 10.00%…

Q: 2. Let the force of interest be 8(t) = 0.06 when t is between 0 and 10 and 8(t) = 0.06+.01(t-10) for…

A:

Q: Over one year, future value or cash flow (CF), present value (PV), and the rate of interest (i) are…

A: Future value or CF = PV x (1+i)^twherePV = Present valuei = rate of interestt = time = 1 year

Q: Calculate the NPV if the discount rate is 14% if: 1- Cost investment OMR 13,000. 2- Cash flows:…

A: Net Present Value  = Present Value of Future  Cash Flows - Initial Investment  Cash flows are OMR…

Q: What is the NPV of the project if the discount rate is 7%? Answer with two decimals. Project A…

A: Solution : Given , Discount rate = 7% Year Cash inflow  = 1 PVF@7% = 2 Present value of cash…

Q: ic formula for present value, along with the given discount rate, r, and the number of periods, n,…

A: Present value = Future value * (1 + discount rate)-No. of periods

Q: At an annual effective rate of interest i = 4%, find the PV of a perpetuity- immediate with annual…

A: Data given: Annual effective rate of interest i= 4% First stream = constant perpetuity of 3 Second…

Q: f the interest is compounded monthly then m is equal to?

A: Compound Interest Compound Interest refers to the interest generated on principal as well as on the…

Q: Variable Target inflation rate Current inflation rate Value 2 percent 9 percent 2 percent 2 percent…

A: Taylor's rule provides the formula to determine the Federal Funds Target Rate as shown below.…

Q: 1. Using the example of a savings account, explain the difference between the effective annual rate…

A: Saving account is the type of deposit account in which interest is paid on the amount deposited.…

Q: At the 6 percent discount rate what will be the present value of the two-period stream of cash…

A: Cash flow streams are the series of cash flows whether cash inflows or cash outflows incurred by a…

Q: The accumulation function for fund X is given by: ax(t) = 1 + 0.5t. The accumulation function for…

A: We have the accumulation function for two funds. At a given time T, they have the same force of…

Q: Consider each part below independently. (Ignore income taxes in your calculations.) Use the built-in…

A: Present value is an estimate of the present value of future cash values ​​that may be received at a…

Q: Write the 4 Formulas for Uniform Annuity Series 1. Find F/A 2. Find P/A 3. Find A/P 4. Fina A/F 5. P…

A: Annuity is a series of equal cash payments or receipts in equal intervals of time. Perpetuity can be…

Q: (TRUE or FALSE?) The PV of the ordinary annuity is larger than the PV of the annuity due because the…

A: The problem case focuses on evaluating the statement that says that the PV of an ordinary annuity is…

Q: Rank the following from highest present value to lowest present value. Assume all else equal. v An…

A: Present value of annuity is the current value of the future payments that are calculated using the…

Q: Merrill Corp. has the following information available about a potential capital investment: Initial…

A: NPV means PV of net benefits which arises from the project during the life of the project. It is…

Q: A former student of an engineering department wishes to donate to the department's scholarship fund.…

A: Present value is a financial concept that represents the value of a future sum of money in terms of…

Q: If a capital investment is $28,048 and equal annual cash inflows are 62,605.3, state the internal…

A: Solution: Internal rate of return factor is arrived at by dividing capital investment by annual cash…

Q: An investment project costs $20,800 and has annual cash flows of $4,300 for six ye a. What is the…

A: Discounted payback period is the period within which the initial cost is recovered by the discounted…

Q: If the principal is 124,860 and the future value is 182,568 what is the value of the single payment…

A: single payment present worth factor =Present value (Principal) /Future Value

Q: Determine the value of X that makes the following two cash flow diagrams equivalent when the interes…

A: Given, The cashflow diagrams that are equivalent at r=10% per period.

Q: What is the present value of payments that are: year 0: 5000, year1: 10000, year2: 12500, year3:…

A: Present value shows the worth of future’s money at present time. It is also known as discounted…

Q: Prime rate is conventionally more than 6% above fed funds rate.

A: Commercial banks charge a different rate to their most creditworthy clients and that rate is…

Q: Simple interest of i = 5% is being credited to a fund. In which period (n) is this equivalent to an…

A: Effective interest rate is the rate calculated for no. of compounding periods per year using the…

Q: If Average net borrowings are OMR 250,000, Average Shareholders fund are OMR 250,000 and Current…

A: Here, Average Net Borrowings is OMR250,000 Average Shareholders Fund is OMR250,000 Current Cost…

Q: Match the following notations with their uniform series names 1. uniform series arithmetic gradient…

A: Uniform series of payments can be calculated by using compound interest factor table. Using compound…

Q: Assume the appropriate discount rate for the following cash flows is 10.3 percent. Year Cash Flow…

A: The present value refers to the discounted value of the cash flow or the current value of the cash…

Q: 30 20

A: Any cash flow can be represented by equivalent uniform series that can be found by present value…

Q: For the following stream of free cash flows, calculate the NPV if the discount rate is 11.9%. Year…

A: It is the difference between the cash outflow and the discounted cash inflow. The usual rule of NPV…

Q: Task: Assume that at time 0 a sum L is lent for a series of n yearly payments. The rth payment, of…

A: Since 'L' amount is lent in exchange of yearly payments having specific interest rates, therefore, L…

Q: vo categories of cash flows: single cash flows, referred to as "lump sum:

A: “Since you have posted a question with multiple sub-parts, we will solve the first three subparts…

Q: (1M) (₁+i) + (0,2m) (1+1/2 i) + (0.2M) 11+ 1/{i) + (- 0,5M) (1+1/21) URN + (-0.2M) = 0.9M

A: The given equation is the future value of cash flows. Where FV of each cash flow is determined with…

Q: What is the annual percentage yield on a fund which earns 4.6% compounded weekly?

A: interest rate = r = 4.6% Compound = weekly = n = 52

Q: At time 0, K is deposited into Fund X, which accumulates at a force of interest of t+3 t² +61 +9 &…

A: We have two different investments, made at two different points of time, but they accumulate to the…

Q: A fixed stream of cash flows occurring at the beginning of each period for a fixed period of time is…

A: A study that proves that the future worth of the money is lower than its current value due to…

Q: Special tools for the manufacture of finished plastic products cost $15,000 and have an estimated…

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Q: Below are the NPVs of a particular investment at two discount rates: At 5%, NPV = $9,500 At 8%,…

A: IRR is the rate of return at which the net present value is 0. IRR is the minimum return a project…

Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.