Q: erpetuity is a type of annuity which has infinite period of payments. The present value of a…
A: Present Value: It represents the present worth of future cash flows. Thus, it is calculated by…
Q: What rate compounded mont
A:
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: To calculate how many years (n) an investment (P) must be kept in an account that earns interest at…
A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…
Q: f a Condura Ref. costs P 24,830 will have an interest of P 2505 monthly that is payable for a year,…
A: The rate of interest is the basis for the calculation of monthly, annual, or quarterly interest. Any…
Q: What interest rate compounded monthly is equivalent to a 10% effective rate?
A: Given, Effective rate=10% Compounding frequency=12
Q: ears if the annual interest rate is 8 percent. a. What would be the future value if the interest…
A: Simple interest is that no interest on interest is considered and in compounding interest interest…
Q: investment, what nominal rate of interest, compounded semi-annually must you earn?
A: Information Provided: Principal = $26,000 Years = 13 Semiannual payments to be received = $1700
Q: a. What is the interest rate per month that is equivalent to 4.26% p.a.?
A: Interest rate is the the rate of interest of due period as a sum of the money borrowed.
Q: what simple interest rate is equivalent to 1% compounded quarterly
A: Simple interest rate is the rate which does not compound means under this rate there is no concept…
Q: How long will it take money to triple itself if invested at (9/100)% compounded quarterly? What is…
A: Interest rate = 9% Present value = 1 Future value of value 1 = 3 Period in years = n Period in…
Q: ective rate of interest on an investment is 5.52%, what is the nominal rate of interes nded monthly?
A: Solution:- Effective rate of interest means the net interest rate for the year after effect of all…
Q: a. How much is the monthly amortization? b. How much is the total interest?
A: Answer:
Q: e? 6 % p.a compounded monthly
A: The given problem can be solved using EFFECT function in excel. EFFECT function computes effective…
Q: What is the equivalent effective rate of interest compounded quarterly if the ne is 19.5%? O 20.97%
A: Effective rate is interest rate after considering the effect of the compounding and while nominal…
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: By comparing their APYS, decide which is better: an investment at 4.26% compounded monthly, an…
A: Answer: Calculation of APY: When ‘r’ is 4.26% compounded monthly,
Q: If the interest rate per day is 0.014%, then what is the annual rate?
A: Interest rate:An interest rate is a percentage on the principal amount at which a lender gives money…
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: a) What is the duration of a perpetuity with a yield of 8%?
A: Yield (r) = 8% Perpetuity duration is found using following formula:
Q: For compounding more frequently than annual, the effective i Select one: a. is lower than the…
A: Effective annual interest rate is a rate that is actually paid or charged.
Q: If the annual interest rate is 12.9% and the dollar amount compounds daily, you would ( a. multiply…
A: Data given: Annual Interest rate=12.9% compounded daily. (Annual means N=1 year)
Q: The (blank) interest rate is referred to as APR and the (blank) interest rate is the true rate…
A: Effective rate ( EAR) FORMULA: EAR =1+APRMM-1M = frequency of compounding
Q: Monthly interest rate?
A: Monthly interest rate is the interest charged on the unpaid balance of credit card.
Q: Find the nominal interest rate compounded quarterly which could be used instea compounded monthly.…
A: In this we have to find effective interest rate in both cases and find equivalent rate.
Q: ) An interest rate of 5% compounded quarterly is equivalent to what rate compounded monthly?
A: Using excel Effective and Nominal Rate function
Q: The ____ of an annuity is the sum of all payments plus all interest earned
A: As per Bartleby Honor Code, when multiple questions are asked, the expert is required only to solve…
Q: A certain some of money P draws interest compounded continuously. If a certain time there are Po…
A: Initial amount (P) = P0 Final amount (F) = 2P0 Interest rate (r) = 2% Let n = Years to accumulate…
Q: The principal P is borrowed and the loan's future value A at time t is given. Determine the loan's…
A: Simple Interest Rate: It is an easy method to compute interest on the loan. It is computed by…
Q: (a) How many payments will be paid? (b) What is the size of the final annuity payment?
A: Given in the question: Annuity Cash Value $12,000 Payment at the beginning of every six…
Q: How long will an amount of money double at a simple interest rate of 2% per annum?
A: Let, it takes n years to double the money. Then, 2 = 1 + 1 x n x 2% 1 = n x 2% n = 1/2% n = 50 years
Q: * If (P) is principal amount, (i) is the rate of interest and (n) is the number of periods in years,…
A: A "factor rate," often known as a "purchase rate," is a method of expressing interest on various…
Q: In terms of an effective annual interest rate, how can the interest payment be rewritten?
A: An APR (Annual Percentage Rate) is the nominal rate or the stated rate of interest in any financial…
Q: The payments are made monthly and its compounding periods is quarterly." What kind of annuity is…
A: payments are made monthly and its compounding periods is quarterly Payment period = monthly…
Q: Derive an equation to find the end-of-year future sum F that is equivalent to a series of n…
A: F=B1+R1+B1+R2+B1+R3+⋯+B1+RN=B×1+RN-1R×1+R
Q: An account pays 2.9% compounded continuously. What is the effective quarterly rate?
A: The continuously compounded rate, r = 2.9%So the impact of continuous compounding on an amount, A…
Q: the anhulty of the money which has fUture Wo ed monthly at the rate of 11%?
A: The future value of annuity includes the annuity amount deposited and interest accumulated over the…
Q: If the annual interest rate is 8%, what is the daily interest rate that would be used as the "r" in…
A: Daily interest rate is often used in finance to determine the amount of interest that one will owe…
Q: Find i (the rate per period) and n (the number of periods) for the following annuity.
A: Compounding: A compounding is the interest charged on interest. When any investment is made for…
Q: For compounding more frequently than annual, the effective interest rate Select one: a. equal to the…
A: Effective annual rate is calculated for a nominal rate which is compounded more than once in a year,…
Q: What interest comp. monthly is equivalent to an interest rate of 16.3% comp. quarterly?
A: First, we need to convert Quaterly compounded rate to Effective Annual Rate So, 16.3% Compounded…
Q: How long would it take your money to double itself if it is invested at 6% simple interest,…
A: Continuous compounding is the mathematical limit that compound interest can reach if it's calculated…
Q: If the interest is compounded bimonthly, then m is equal to
A: M denotes to no of compounding for each year. It is given that the interest is compounded bimonthly.…
Q: How long will it take for a some of money to double if it is invested at 5% interest compounded…
A: The rule of 72 is used to determine the years taken by investment to double.
Q: Which of the following is TRUE about the interest under Simple Interest? O Interest earned yearly is…
A: Simple Interest is the method in which we calculate the interest on a specific principal amount at a…
Q: What nominal interest rate compounded quarterly is equivalent to j∞=j∞= 7%?
A: Nominal Interest Rate: This percentage increase in the amount of money you pay the lender in…
Step by step
Solved in 2 steps
- what simple interest rate is equivalent to 1% compounded quarterlyIf the compounding frequency is monthly and the discount factor=0.62026, what is the value of the corresponding annual interest rate? What is the corresponding continuous compounding annual interest rate if the discount factor remains at 0.62026?If the interest rate per day is 0.014%, then what is the annual rate?
- If the interest is compounded bimonthly, then m is equal toThe present value of a perpetuity is equal to the payment on the annuity, PMT, divided bythe interest rate, I : PV = PMT/I. What is the future value of a perpetuity of PMT dollars peryear? (Hint: The answer is infinity, but explain why.)An investment pays you 9% interest, compounded quarterly. What is the periodic rate of interest? What is the nominal rate of interest? What is the effective rate of interest?