The amount of $10,000 is invested and will be worth $21,000 in nine years What is the cortiusly compoundednominal (annual) interest rate?Select one:O a. 8.2%O b. 7.7%C. 8.8%O d. 6.5%O e. 7.1%

Continuous Compounded Interest rate is the interest rate that is calculated on the principal amount…

The amount of $10,000 is invested and will be worth $21,000 in nine years. What in the continuoushy compounded nominal (annual) interest rate? Select one: O a. 8.2% O b. 7.7% O c. 8.8% O d. 6.5% O e. 7.1%

The amount of $10,000 is invested and will be worth $21,000 in nine years. What in the continuoushy compounded nominal (annual) interest rate? Select one: O a. 8.2% O b. 7.7% O c. 8.8% O d. 6.5% O e. 7.1%

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

The amount of $10,000 is invested and will be worth $21,000 in nine years What is the cortiusly compounded
nominal (annual) interest rate?
Select one:
O a. 8.2%
O b. 7.7%
C. 8.8%
O d. 6.5%
O e. 7.1%

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Calculate the future value in five years of $4,000 received today if your investments pay for the following interest rates. (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16)) 6 percent compounded annually b. 8 percent compounded annually a. C. 10 percent compounded annually d. 10 percent compounded semiannually 10 percent compounded quarterly e. Future Value
Assume that you invest $1000 for 15 years in an account that pays an interest rate of 7% per year with annual compounding. Calculate the proportion of the total value of the account that can be attributed to interest-on-interest, at the end of 15 years. * 38.06% 36.24% 25.70% 0% 100%
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Suppose the term structure of interest rates is shown below: Term Rate (EAR%) 1 year 5.00% 2 years 3 years 5 years 10 years 20 years 4.50% 4.30% 4.30% 4.25% 4.15% The present value of receiving $1000 per year with certainty at the end of the next three years is closest to:
Principal of 3000 OMR is invested for 4 years at rate 2.5%. Find the future value if the interest is compounded continuously Select one: O a. 3311.438 OMR O b. 3315.512 OMR O c. 8154.845 OMR O d. None of the above
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Calculate the present value of the following single amounts. (FV of $1, PV of $1, FVA of $1, and PVA a financial calculator. Round your answers to 2 decimal places.) 1. 2. 3. Future Value $ 8,900 5,900 4,900 Interest Compounded 4% Annually 10% Semiannually 8% Quarterly Annual Rate Period Invested 3 years 6 years 2 years Present Value
Present Value of Amounts Due Assume that you are going to receive $730,000 in 10 years. The current market rate of interest is 4.5%. a. Using the present value of $1 table in Exhibit 5, determine the present value of this amount compounded annually. Round to the nearest whole dollar. b. Why is the present value less than the $730,000 to be received in the future? The present value is less due to the compounding of interest V over the 10 years.
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