Suppose that a savings account pays an effective rate of interest of 11.7 percent. What is the equivalent annual compound interest rate if interest is compounded semi-annually? Answer = %?

Calculating Real Rates of Return IfTreasury bills are currently paying 4.7 percent and the inflation rate is 1.9 percent, what is the approximate real rate of interest? The exact real rate?

What is the PV of a 6-year, $149 annuity due if the annual interest rate is 5% ?

Assume that time is measured in months.  Calculate the present value at time 0 of a payment of £131 paid at time 18, using an interest rate of 9% per annum effective.

H1.

If the annual interest rate is 8%, what is the daily interest rate that would be used as the "r" in the time value of money equation? Hint: the equation uses the decimal equivalent of the percent Enter your answer to four decimal places.

Suppose Snli 40 and (1 + i)n = 3.7, where i is an effective annual interest rate. What is the present value of an annuity-immediate which has annual payments of 150 for 3n years?

Given i = 10% compounded quarterly. Find the effective interest rate if payments are made monthly.

What is the present value of a 8-year ordinary annuity with annual payments of $511, evaluated at a 4 percent interest rate? Round your answer to 2 decimal places; for example 2345.25.

The current amount A of a principal P invested in a savings account paying an annual interest rate r is given by A = P(1+r/n)^(rt) where n is the number of times per year the interest is compounded. For continuous compounding, A = Pe^(rt). Suppose $10,000 is initially invested at 2.5 percent (r = 0.025). a. Plot A versus t for 0 ≤ t ≤ 20 years for four cases: continuous compounding, annual compounding (n = 1), quarterly compounding (n = 4), and monthly compounding (n = 12). Show all four cases on the same subplot and label each curve. On a second subplot, plot the difference between the amount obtained from continuous compounding and the other three cases. b. Redo part a, but plot A versus t on log-log and semilog plots. Which plot gives a straight line?