Would you rather invest in an account that pays 7% with annual compounding or7% with monthly compounding? Would you rather borrow at 7% and make annualor monthly payments? Why?

Q: If annuity A has 30 payments of $500 at an interest rate of 10% and annuity B has 30 payments of…

A: Present value is the discounted value or today's value of a set of cash flows that will occur in the…

Q: Can you show the steps specifically on how you got the quarterly interest rate. Instead of just the…

A: The use of rate function in excel is a prominent way to estimate accurate interest rate of a loan…

Q: Q.6. (a) The Rose Garden company will maintain a garden plot for you for a payment of OMR 75 now,…

A: Annuity is a no. of payments which has equal size and made in equal interval of time. Person…

Q: If there is a deflation rate of 2% and your account is earning a nominal interest rate of 1.75%,…

A: Deflation rate (d) = 2% Nominal interest rate (r) = 1.75%

Q: If interest on a savings account is compounded semiannually, the effective rate of interest will…

A: In nominal interest is like simple interest but there is no compounding , in simple interest there…

Q: Which of the following is the cheapest for a borrower? 7% annual money market basis 7% semi-annual…

A: Generally, the annual basis is cheaper as compared to the semiannual basis, because on an annual…

Q: If the payments are monthly how would you set up the present value?

A: The concept of present value asserts that a sum of money today is worth more than the same sum in…

Q: Use the compound interest formula A=P(1+r/n)to the not to complete this problem. If you invest $1800…

A: Use the compound interest formula A=P(1+r/n)^(n*t)   = final amount = Initial Principal  =…

Q: Suppose the interest rate is 4.3%. a. Having $450 today is equivalent to having what amount in one…

A: The money's present value is its current worth compared to some of its potential future value after…

Q: last year, i took out a loan with an interest rate of 4.24% when inflation was only 1.9%. now…

A: The real interest rate is the inflation adjusted interest rate which is reflecting the increase in…

Q: 9. Which two of the following statements is FALSE (CHOOSE TWO) a. In an ordinary annuity, payments…

A: Annunity:- An annunity is an series of equal payments made at equal interval of time for example,…

Q: a) Why is wealth maximization considered as a better measure than profit maximization?

A: Note: As per our guidelines, we can only answer one question at once. Please post other questions in…

Q: Your financial planner offers you two different investment plans. Plan 1 is a R3958 annual…

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

Q: Q)You are given the future value of an annuity, A, the monthly payment, R, and the annual interest…

A: Future Value of Ordinary Annuity means the concept which finds out the sum total of all the cash…

Q: What do we know about a loan, which is said to have annuity payments? a. This loan has annual…

A: The loan can be referred to as the debt amount that the borrower takes till certain maturity period…

Q: Consider two riskless perpetuities: (i) pays $120 every year; (ii) pays $10 every month. If the…

A: When the rate of return of the two risk less perpetuities is same, the factor that influences the…

Q: If the rate of inflation is 6.5%, what nominal interest rate is necessary for you to earn 3.3% real…

A: Given information: Rate of inflation is 6.5% Real interest rate on investment is 3.3%

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: 003) You want to buy a $170,000 home and plan to pay 20% down and got an interest rate of 4%. What…

A: A mortgage is a type of loan used to purchase a property or a home. The borrower (homebuyer) is…

Q: Suppose an interest rate of 4% a) having $200 today is equivalent to having what amount in one year?…

A: (a) Interest  = 4% Present value =$200 Time = 1 year So, Amount at the end of one year =  Future…

Q: In this problem. Deposits of 500 will be deposited starting at time 5 and will go on up to time 18.…

A: Solution:- “n” means the number of times a deposit is made.

Q: 4. Suppose our savings account ($937.33) pays us compound interest with monthly compounding.…

A: Compounding is related to earning interest on interest. The compounding interest is more beneficial…

Q: what would happen if interest rate is doubled in ordinary annuity?

A: What is an ordinary annuity? An ordinary annuity is a progression of equivalent installments made…

Q: Do I take the monthly payment and add the interest then divide it to find the total payments? And do…

A: The monthly payments amount of $828.85 that has been computed here will be constant over the next 30…

Q: Under what interest rates would you prefer a perpetuity that pays $2 million a year to a one- time…

A: This question require us to compute the interest rate in case of a perpetuity.

Q: An annuity and an annuity due with the same number of payments have the same future value if the…

A: Meaning of annuity and annuity due:Annuity-Ordinary annuity is an annuity, the payment of which is…

Q: What will the money rate of interest have to be at a 6% inflation rate to entice people to keep the…

A: given, real rate = 5% inflation= 6%

Q: What's the rate of return you would earn if you paid $3,480 for a perpetuity that pays $70 per year?…

A: The objective of this question is to calculate the rate of return on a perpetuity. A perpetuity is…

Q: Suppose that you want to take out a loan and that your local bank wants to charge you an annual real…

A: Compute the nominal interest rate: Nominal interest rate is calculated by using following formula:

Q: How much would your monthly payment be if you wish to pay the total amount due on a loan of P144,039…

A: Given, The total value of loan amount due is P144,039. Rate of interest is 6%. Number of years 11.

Q: Can we calculate the total annual interest payment for a credit card by using the future value…

A: The future value is the amount that will be received at the end of a certain period. In simple…

Q: hat happens to the interest if I pay more than my payment amount on a car or home loan? What happens…

A: The loans are paid by equal monthly payments that carry the payment for interest and payment for…

Q: How much money, Ap, should you invest at the present in such a bond if you would like to receive…

A: A series of unending equal cash flow is called perpetuity. The present value of perpetuity can be…

Q: ution to such a

A: Given contribution as, $5,000 to $3,000 per year.

Q: If an electric appliance present worth is P 11,712 and is being paid P 1,636 indefinitely, calculate…

A: Perpetuity means infinite no. of payments of same amount and made in equal intervals. Person can…

Q: Assess the following statements: Simple interest calculations assume the interest earned is never…

A: 1. True since interest on interest is not earned 2. True 3. Annual rate using 4.95% semi annual rate…

Q: You are explaining how a variable annuity functions to one of your clients. Which of the following…

A: Because the account's value is subject to change based on the success of the market, variable…

Q: How much payment Z should he make on the exact time after the last regular payment has been made to…

A: We have to find the payment Z to be made on the exact time after the last regular payment has been…

Q: F=19803 5% 10% 15% $2X $3X $3X Select one: O a. 3500 O b. 2000 O c. 10000 O d. 3000 O e. 5000

A: Future Value = Sum of Amount * ( 1 + rate )years

Q: How low will take for a deposit of P3,105,000 to earn P515,750 if invested at the rate of 15 1/4%?

A: The future value of the annuity is the future worth of a cash flow series at a certain rate of…

Q: 1. What is the different between an ordinary annuity and an annuity due? Which occurs more in…

A: Hi, there, Thanks for posting the question. As per our Q&A honour code, we must answer the first…

Q: If you were given a choice of investing in an account that paid quarterly interest and one that paid…

A: Effective annual rate is the actual rate an investment generates after taking all the compounding…

Q: If you are an investor, you will put a sum amount in a bank account and will keep on adding that…

A: Financial planning is an process of planning of your  Short term and long term financing goals.…