Slides

The value of a bond is found as the present value of interest payments plus

1. If you are borrowing money and paying interest, would you prefer an interest rate that compounds annually, quarterly, or daily? Why? (2-4 sentences. 1.0 points)

Poor Dog, Inc. borrowed $135,000 from the bank today. They must repay this money over the next six years by making monthly payments of $2,215.10. What is the interest rate on the loan? Express your answer with annual compounding.

13. What is the formula for the Present Value (PV) for a finite stream of cash flows (1 per year) that lasts for 10 years?

What annual interest rate is needed to produce $200,000 after five years if only $100,000 is invested?

10. An investment of $1,000 today will grow to $1,100 in one year. What is the continuously compounded rate of return?

Therefore the annual interest rate is 8% and the effective annual rate compounded quarterly is 8.24%

Week 8 DQ 4Is the compound interest formula—such as would be used to calculate a car loan—an

If the present is Year 0 and rates compound annually, in what year does the first outlay of $45,000 occur? Hint, you’re using the perpetuity approach to valuation.

2. If you had a payment that was due you in 5 years for $50,000 and you could earn a 5% rate of return, how much

After the calculations you end up coming out with a rate of 14.87%. The third and final part of question three asks what rate you will need if the interest is compounded semiannually. All you have to do is double the amount of terms and you will come out with a lower number of 7.177%. Since the interest is compounded semiannually that means that you will need to times that number by two and you come out with your final number of 14.35%.

(Compound value solving for I) at what annual rate would the following have to be investe

The major topics explored in Calculus C are largely defined by derivatives of vector-valued and parametrically defined functions, integration by partial fractions, improper integrals, series convergence (Taylor and Maclaurin), L’Hopitals Rule, and numerous applications. All of the following topics require a solid foundation in not only Calculus A but also Calculus B.

We then get the annuity of the 1,200 semiannual PMTs at year 6, and then at Present Value

Metal loans were based on weight. Before the concept of money came in existence, loans of grain and silver served as a bargaining tool to facilitate trade. Silver was used in town and grain was used in the country. Under the laws of usury, the collection of interest was forbidden. Today, interest rates are very closely watched market indicators. Interest rates have a dramatic effect on finance and economics.