Corporate Finance
12th Edition
ISBN: 9781259918940
Author: Ross, Stephen A.
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 4, Problem 75QAP
Rule or 69.3 A corollary to the Rule of 72 is the Rule of 69.3. The Rule of 69.3 is exactly correct except for rounding when interest rates are compounded continuously. Prove the Rule of 69.3 for continuously
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The interest rate (i) is assumed to be a compound rate, unless specifically stated as simple
interest.
Select one:
O True
O False
Uniform series transactions involve some uniform amount either being deposited or withdrawn at
the end of each interest period for some n compounding periods.
Select one:
True
False
5. Solve for the following assuming that uncovered interest rate parity holds.
a. is = .03, ie -.02 What is %AEse?
a. Ese = 2, is=.03, ie -.02 What is E?
b. E° = 4, is = .03, ie -3.05 What is Ese ?
Chapter 4 Solutions
Corporate Finance
Ch. 4 - Prob. 1CQCh. 4 - Prob. 2CQCh. 4 - Prob. 3CQCh. 4 - Prob. 4CQCh. 4 - Time Value On subsidized Stafford loans, a common...Ch. 4 - Prob. 6CQCh. 4 - Prob. 7CQCh. 4 - Prob. 8CQCh. 4 - Prob. 9CQCh. 4 - Prob. 10CQ
Ch. 4 - Simple Interest versus Compound Interest First...Ch. 4 - Prob. 2QAPCh. 4 - Prob. 3QAPCh. 4 - Calculating Interest Rates Solve for the unknown...Ch. 4 - Prob. 5QAPCh. 4 - Prob. 6QAPCh. 4 - Prob. 7QAPCh. 4 - Calculating Rates of Return Although appealing to...Ch. 4 - Prob. 9QAPCh. 4 - Prob. 10QAPCh. 4 - Present Value and Multiple Cash Flows Specter Co....Ch. 4 - Prob. 12QAPCh. 4 - Calculating Annuity Present Value An investment...Ch. 4 - Prob. 14QAPCh. 4 - Prob. 15QAPCh. 4 - Prob. 16QAPCh. 4 - Calculating EAR First National Bank charges 11.4...Ch. 4 - Prob. 18QAPCh. 4 - Calculating Number of Periods One of your...Ch. 4 - Prob. 20QAPCh. 4 - Prob. 21QAPCh. 4 - Simple Interest versus Compound Interest First...Ch. 4 - Calculating Annuities You are planning to save for...Ch. 4 - Prob. 24QAPCh. 4 - Prob. 25QAPCh. 4 - Prob. 26QAPCh. 4 - Prob. 27QAPCh. 4 - Prob. 28QAPCh. 4 - Prob. 29QAPCh. 4 - Prob. 30QAPCh. 4 - Calculating Interest Expense You receive a credit...Ch. 4 - Prob. 32QAPCh. 4 - Growing Annuity Southern California Publishing...Ch. 4 - Prob. 34QAPCh. 4 - Prob. 35QAPCh. 4 - Prob. 36QAPCh. 4 - Prob. 37QAPCh. 4 - Calculating Loan Payments You need a 30-year...Ch. 4 - Prob. 39QAPCh. 4 - Prob. 40QAPCh. 4 - Prob. 41QAPCh. 4 - Prob. 42QAPCh. 4 - Prob. 43QAPCh. 4 - Prob. 44QAPCh. 4 - Prob. 45QAPCh. 4 - Prob. 46QAPCh. 4 - Prob. 47QAPCh. 4 - Prob. 48QAPCh. 4 - Prob. 49QAPCh. 4 - Prob. 50QAPCh. 4 - Prob. 51QAPCh. 4 - Prob. 52QAPCh. 4 - Prob. 53QAPCh. 4 - Prob. 54QAPCh. 4 - Prob. 55QAPCh. 4 - Prob. 56QAPCh. 4 - Prob. 57QAPCh. 4 - Prob. 58QAPCh. 4 - Prob. 59QAPCh. 4 - Prob. 60QAPCh. 4 - Prob. 61QAPCh. 4 - Prob. 62QAPCh. 4 - Prob. 63QAPCh. 4 - Prob. 64QAPCh. 4 - Prob. 65QAPCh. 4 - Prob. 66QAPCh. 4 - Prob. 67QAPCh. 4 - Prob. 68QAPCh. 4 - Prob. 69QAPCh. 4 - Prob. 70QAPCh. 4 - Prob. 71QAPCh. 4 - Prob. 72QAPCh. 4 - Prob. 73QAPCh. 4 - Prob. 74QAPCh. 4 - Rule or 69.3 A corollary to the Rule of 72 is the...Ch. 4 - Prob. 1MCCh. 4 - Prob. 2MCCh. 4 - Prob. 3MCCh. 4 - Prob. 4MCCh. 4 - Prob. 5MC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- 16. Which of the following statements is true? Select one: a. The nominal interest rate is always greater than the effective interest rate b. The effective interest rate always equals the nominal interest rate c. The effective interest rate is always greater than or equal to the nominal interest rate d. The effective interest rate is always less than or equal to the nominal interest ratearrow_forwardWhen using the interest tables, the needed interest rate is determined from the intersection between the _____________. a interest rate and number of periods b interest rate and factor type c number of periods of factor type d none of thesearrow_forwardWhich of the following statements is true?a. When the interest rate increases, the present value of asingle amount decreases.b. When the number of interest periods increases, thepresent value of a single amount increases.c. When the interest rate increases, the present value of anannuity increases.d. None of the above are true.arrow_forward
- 8.What is imputed interest? a. Interest based on the stated interest rate b. Interest based on the implicit interest rate c. Interest based on the average interest rate d. Interest based on the coupon ratearrow_forwardWhat is expectations theory of the term structure of interest rates? Group of answer choices a. Long term interest is equal to average short-term interest rates. b. Average rates is the term of structure of interest rates. c. Short-term interest is equal to long-term interest rates. d. Long term interest is the sum of all short-term interest rates.arrow_forward(a) Define effective interest rates and prove that r=| 1+ 1.arrow_forward
- Find the interest rate implied by the following combinations of present and future values: (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Leave no cells blank - be certain to enter "0" wherever required.) Find the interest rate implied by the following combinations of present and future values: (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Leave no cells blank - be certain to enter "0" wherever required.) Present Value years future value interest rate $500 12 1126 233 5 375 400 8 400arrow_forwardFill in the blank with an appropriate word, phrase, or symbol. When using the simple interest formula, time, t, is expressed in the same period as the ______. When using the simple interest formula, time, t, is expressed in the same period as the ▼ principle intrest ratearrow_forwardA) Explain under which conditions the uncovered interest rate parity condition could be expressed as 1+it = (1+r*)Et+1/Etarrow_forward
- When the total interest charged is linearly proportional to the initial amount of the loan, the interest rate and the number of interest periods, the interest is said to be a.) Effective b.) Continuous Compounding c.) Simple d.) Compoundingarrow_forward2.-In compound interest calculations, the interest rate applied can be known from the initial and final value of a deposit, and the time it was deposited. true or false?arrow_forwardIllustrate the very important relationships between changes in interest rates and varying rates of prepayment?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
What Does ROI (Return On Investment) Really Mean?; Author: REtipster;https://www.youtube.com/watch?v=Z6ThJvNr1Dw;License: Standard Youtube License