End of Year, k Salary (A$) 1 45,000 46,800 48,672 50,619 3 4

Q: Suppose that you borrow $42,500 at 11.4%compounded monthly over seven years. Knowingthat the 11.4%…

A: The interest rate that is evaluated by deducting the inflation rate from the nominal rate to…

Q: The annual operating and maintenance (O&M) expenses of a company are $195,000 at EOY1 decreasing by…

A: Future equivalent can be calculated by using this equation Future equivalent =Annual cost(1+Interest…

Q: Assume that, during the next ten years, real GDP per capita in China grows at an average long-run…

A: Rule of 72 is a rule of thumb used in finance that helps in estimating the number of years that it…

Q: Annual expenses for two alternatives have been estimated on different bases as follows: If the…

A: Answer  -   Step 1 -  Calculation of Nominal Rate -  Formula - (1+RR) x (1+IR) -1 Given, Real rate -…

Q: Suppose that a person invests $5,000 today at an annual interest rate of 10% for 8 years. (a) Given…

A: Purchasing power represent the value of money that can be use to buy the amount of goods. Inflation…

Q: An investment will pay you $4,611.9 in 3 years if you pay $1,376.68 today. What is the implied rate…

A: Rate of return = (Future value / Present value)^(1/Time) - 1 where, Future value =  $4,611.9 Present…

Q: Suppose that you deposit $200 at the end of each month into an account paying an expected annual…

A: given, monthly compounding N    =10 x 12 = 120I    =3%12PV   =0PMT =200   FV    = need to find

Q: Ten years ago, an item cost Php2,500. The rate of inflation for the first 4 years was 4%, during the…

A: Working note:

Q: The annual operating and maintenance (O&M) expenses of a company are $195,000 at EOY 1 decreasing by…

A: Interpretation: Annual Operating and Maintenance Expenses at end of year 1 = $195,000 Annual…

Q: Consider the following situation: at the start of the year, a one-year bill is priced at $920…

A: The nominal interest rate is the interest rate before considering the inflation rate. It is often…

Q: Quarterly sales have a trend given by Y = 50,000t – 15,000, where Y is sales in pesos and t is the…

A: Trend for Q2 =  50,000t – 15,000 = (50000*6) -15000 = 285000   * As  Q2 for 2021 is period 6 from Q1…

Q: Annual expenses for two alternatives have been estimated on different bases as follows: If the…

A: Computation:

Q: A series of twenty-one constant-dollar payments beginning with $5,000 at the end of the first year…

A: If inflation is deducted from the nominal interest rate then real interest rate is derived. This…

Q: A series of five payments in constant dollars, beginning with $6,000 at the end ofthe first year,…

A: The current value of the cash flows or an asset after discounting is termed as the present worth.

Q: Consider a firm that expects to generate the following earnings stream over the next five years. The…

A: The question is based on the concept of Financial Management.

Q: 7. annual MARR = 3% and the general inflation rate is 7% per year? The nearest answer is: What is…

A: Real value of MARR = [( 1 + nominal value of MARR) * ( 1 + inflation rate) ]- 1   Real value of MARR…

Q: If the velocity of circulation is constant, real GDP is growing at 3 percent a year, the real…

A: Given, Real GDP growth = 3% Real Interest Rate = 2% Nominal Interest Rate = 7%

Q: (a) Calculate the perpetual equivalent annual worth in future dollars for years 1 through ∞ for…

A: (a) The calculation is shown as: The formulae snip is annexed below:

Q: Your company is expected to earn (as a cash flow) $3 million next year, $3.06 million the following…

A: Here, Cash Flow in Year 1 is $3 million Cash Flow in Year 2 is $ 3.06 million Cash Flow in Year 3 is…

Q: the discount yield on a 3 month T-bill is 6.5%. assuming there are 360 days in a year, what is the…

A: Given: Face value = 1,000 Interest rate = 6.5% Period = 3 months or 90 days(3*30)

Q: The annual operating and maintenance (O&M) expenses of a company are $195,000 at EOY 1 decreasing by…

A: Future equivalent is calculated as: =Annual Cost*(1+Rate of Interest)Year

Q: The annual operating and maintenance (O&M) expenses of a company are $195,000 at EOY 1 decreasing by…

A: Operating and maintenance expense = $195,000 Gradient = $8500 Time period = n = 10 years Interest…

Q: What is the annualized investment rate % on a Treasury bill that you purchase for 9310 that will…

A: Value at the maturity (F) = 9533 Purchase price (P) = 9310 n = 91 days

Q: A deposit of $1000 is made into an account that promises a minimum of 2% per year increase in…

A: The minimum value that will be in account at year 3 = Deposit amount *(1.02)^3 * (1.03)* (1.01)…

Q: but in 4 years, the cost will b mpany sets aside $8 million will the inflation rate have to unt of…

A: Inflation rate can be calculated usning below formula Inflation rate =  (Current value - Base value)…

Q: You deposited $10,000 today into a saving account for 5 years with a market rate of 8% per year. The…

A: Deposit amount = $ 10000 Period = 5 Years Interest rate = 8% Inflation rate = 2%

Q: For a present sum of $620,000, determine the annual worth (in then-current dollars) in years 1…

A: Present sum = 620000 i = 12% inflation rate = 5% n=7 years PW = 620000(A/P,12%,7) =620000(0.2191177)…

Q: An investor lends $10,000 today, to be repaid in a lump sum at the end of10 years with interest at…

A: The real rate of return of an investment is the rate of return an investment generates after taking…

Q: What is the price of a 91-day, $10,000.00 Government of Canada treasury bill that yields 2.65% per…

A: Face Value = $10,000 Yield = 2.65% per annum Time Period = 91-day

Q: A barrel of oil has a current cost of $90/barrel. If general inflation is 2.4%/year and oil has a…

A: The nominal rate of interest is the stated rate of interest that is being charged on the investment…

Q: 1) what is the discount yield on a 9-month T-bill sold for RM925, assuming there are 365 days in a…

A: T bill are sold at discount to face value the discount rate is YEILD on T bills.

Q: Assume that you conduct a relative value trade and close it out after 34 days. Your 34-day return is…

A: Effective annual yield is the real rate of return that is obtain on an investment as it considers…

Q: You found an investment opportunity to deposit $15,000 every year for 10 years into an account…

A: The future value of an annuity is the recurring amount, which is being submitted at a particular…

Q: In year zero, you invest P10,000 in a 15% security for 5 years. During that time, the average annual…

A: Information provided in the given question: r = real rate of interest = (interest on the security -…

Q: The average cost of a certain model car was $22,000 ten years ago. This year the average cost is…

A: Expected Return: The expected return is the minimum required rate of return which an investor…

Q: Based on economists' forecasts and analysis, one-year T-bill rates and liquidity premiums for the…

A: T-Bills or Treasury Bills are debt instruments used by government to raise debt from public.…

Q: A given item now costs of ₱2,000. The cost of this item in 2 years time is ₱2,247.00. The inflation…

A: Use the Excel RATE function with the following inputs to determine the annual rate of inflation:…

Q: General price inflation is estimated to be 3% for the next 5 years, 5 % the 5 years after that, and…

A: Future Worth(FW) is value of current amount in future time calculated by compounding current amount.

Q: The inflation rates for 4 years are forecast to be 3%, 3%, 4%, and 5%. The interest rate exclusive…

A: Time value of money- It is based on the concept that money earned today is worth more than similar…

Q: Suppose that a company borrows $100,000 from investment pool at 14% compounded quarterly over 3…

A: The question is based on the concept of calculation of equivalent payout for loan amount and further…

Q: With an annual inflation rate of 1.57%, how much did an item that now costs $5700 cost 4 years…

A: Inflation rate is 1.57% Current Cost of Item is $5700 Time period is 4 years To Find: Cost of an…

Q: Let’s assume that the real rate of return is a constant 20%. If inflation is 50%, then the nominal…

A: I have calculated the following in the next step: Real value of investment= Maturity Value    less…

Q: Please show working Someone promises to pay you $1,000 in years 5, 10 and 15 for a total of $3,000.…

A: Duration of an annuity is simply the cashflow weighted average. it is calculated as follows D =…

Q: If wages grew 6.60 percent, but inflation was 4.50 percent, what was the approximate real increase…

A: Nominal rate is a total rate at which prices are increased. It considers all the possible elements…

Q: The price of a 90-day Treasury bill is quoted as 10.00. What continuously compounded return (on an…

A: 2.  Calculate continuously compounded return on Treasury bill

Q: A 91-day Treasury bill issued three weeks ago is quoted at 4.23. How much would you pay for a bill…

A: The calculation of the payment of the cash price.

Instruments of Foreign Exchange Market

Foreign exchange is a worldwide market in which one nation’s currency is converted into another nation’s currency. In further terms, exchanging of nations currency with foreign currencies. Foreign exchange happens at a specified rate which is termed the foreign exchange rate. The exchange rates are not constant continuously changing as they are derived by market forces of supply and demand. Widely used foreign currencies are the United States- dollar, Euro, Japanese Yen, British pound, and Australian dollar. US- dollar is the most denominated foreign currency. The Euro to US dollar is a widely used currency pair in the forex market as these two currencies represent the world’s enormous economy. Forex trade is simple as exchanging currencies at the bank. The main players of forex markets are the central banks, financial institutions, intermediaries, investments banks, and other banks. Central Bank is the supreme player who decides the currency value of their own nation on the forex market. Mostly foreign exchange-traded at FX market (forex market) when tourists’ visits a foreign country, import, and export happens between two countries.