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A: Present value is the value of the future expected/calculated amount as of today.
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A: Continuous Compounding N = 8 Present Value factor = 1.7506725
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Q: annually
A: *Answer:
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A: Given final value (F) = P 13996.80 r = 8% n = 2 years
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A: continous compounding formula: A=p×er×t where, p=principal r=rate t=time
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- Define the stated (quoted) or nominal rate INOM as well as the periodic rate IPER. Will the future value be larger or smaller if we compound an initial amount more often than annually—for example, every 6 months, or semiannually—holding the stated interest rate constant? Why? What is the future value of $100 after 5 years under 12% annual compounding? Semiannual compounding? Quarterly compounding? Monthly compounding? Daily compounding? What is the effective annual rate (EAR or EFF%)? What is the EFF% for a nominal rate of 12%, compounded semiannually? Compounded quarterly? Compounded monthly? Compounded daily?(1) What is the value at the end of Year 3 of the following cash flow stream if the quoted interest rate is 10%, compounded semiannually? (2) What is the PV of the same stream? (3) Is the stream an annuity? (4) An important rule is that you should never show a nominal rate on a time line or use it in calculations unless what condition holds? (Hint: Think of annual compounding, when INOM = EFF% = IPER.) What would be wrong with your answers to parts (1) and (2) if you used the nominal rate of 10% rather than the periodic rate, INOM/2 = 10%/2 = 5%?You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years. Which table will help you determine the value of your account at the end of 12 years? A. future value of one dollar ($1) B. present value of one dollar ($1) C. future value of an ordinary annuity D. present value of an ordinary annuity
- what is the nominal rate of interest compounded continuously for 8 years if the present worth factor is equal to1. 7506725 A.4% B.5% C.6% D.7% E.Noneat what interest rate will a principal of P9,500 accumulate to P15,000 in 2 years compounded semi-annually?What rate of interest, compounded annually, will result in the receipt of P15 938.48 if P10 000 is invested for 8 years?
- What is the future value of $6000 invested for 4 years, if the interest rate is 12% p.a., compounding quarterly? A. $9441 B. $9628 C. $9686 D. $8880What is the present value of $6,700 received 14 years from now using a 11% interest or discount rate, with interest compounded quarterly?Suppose S500 is invested at 4% compounded quarterly. (a) How long will it take the investament to accumulate to $750 if the exact method for accumulation is in effect? (b) How long will it take the investment to accumulate to $750 if the practical method for accumulation is in effect? Be sure to us linear interpolation! (e) What anmual effective interest rate must 8500 be invested at to accumulate to S750 in 10 years?
- If $1000 becomes $1,811.36 after 5 years when invested at an unknown rate of interest compounded quarterly, determine the unknown nominal rate and the corresponding effective rate.If 45,648.00 becomes 67,830.53 in 5 years, how much is the rate of interest compounded quarterly?What is the equivalent present value of the following series of payments: ₱ 5,000 the first year, ₱ 5,500 the second year, and ₱ 6,000 the third year? The interest rate is 8%, compounded annually. a. ₱ 15,904.22 b. ₱ 13,590.43 c. ₱ 12,573.90 d. ₱ 14,107.99