For specific values of interest rate, express in percentage rounded off to 2 decimal places, e.g. 12.34%; while monetary values must be written in accounting format (rounded to the nearest centavos) with cur- rency symbol when indicated, e.g. P 1, 234, 567.89. For time durations that are not exact whole numbers, round off to 2 decimals, e.g. 1.43. (1) (a) An annuity immediate has semiannual payments of P 10,000 for 10 years at a rate of 6% convert- ible quarterly. Find its present value. (b) An annuity immediate has quarterly payments of P5,000 for 6 years at a rate of 4% convertible semiannually. Find its present value. (2) An cashflow has a first payment of P 1,000 and increases by P 100 each period until payments reach P1,500. All payments are credited at the end of each period. There are 10 further payments of P 1,500. Find the present value at 6.5% effective per period. Hint: Write this as a sum of an increasing annuity and a deferred annuity but be cautious that first payment P is not equal to the periodic increase Q in payment.

For specific values of interest rate, express in percentage rounded off to 2 decimal places, e.g. 12.34%; while monetary values must be written in accounting format (rounded to the nearest centavos) with cur- rency symbol when indicated, e.g. P 1, 234, 567.89. For time durations that are not exact whole numbers, round off to 2 decimals, e.g. 1.43. (1) (a) An annuity immediate has semiannual payments of P 10,000 for 10 years at a rate of 6% convert- ible quarterly. Find its present value. (b) An annuity immediate has quarterly payments of P5,000 for 6 years at a rate of 4% convertible semiannually. Find its present value. (2) An cashflow has a first payment of P 1,000 and increases by P 100 each period until payments reach P1,500. All payments are credited at the end of each period. There are 10 further payments of P 1,500. Find the present value at 6.5% effective per period. Hint: Write this as a sum of an increasing annuity and a deferred annuity but be cautious that first payment P is not equal to the periodic increase Q in payment.

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter4: Exchange Rate Determination

Section: Chapter Questions

Problem 1BIC

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If Treasury bills are currently paying 6.35 percent and the inflation rate is 1.6 percent, what is the approximate and the exact real rate of interest? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) A. approximate real rate B. exact real rate
Using the appropriate interest table, compute the present values of the following periodic amounts due at the end of the designated periods. $53,490 receivable at the end of each period for 8 periods compounded at 11%. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)
a) State Bank's semi-annual rate is ?% (Round to two decimal places.) b) Frost Finance's semi-annual rate is ?% (Round to two decimal places.)
Suppose the real rate is 3.3 percent and the inflation rate is 2.4 percent. What rate would you expect to see on a Treasury bill? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Treasury bills are currently paying 8 percent and the inflation rate is 3 percent. What is the approximate real rate of interest? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) What is the exact real rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
The real rate is 4 percent and the inflation rate is 5.6 percent. What rate would you expect to see on a Treasury bill? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
What is the present value of $4,010 to be received at the beginning of each of 29 periods, discounted at 5% compound interest? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)
n the credit account statement below, the values of the annual percentage rate (APR), finance charge, and the new balance must be calculated. PreviousBalance AnnualPercentageRate (APR) MonthlyPeriodicRate(as a %) FinanceCharge(in $) Purchasesand CashAdvances PaymentsandCredits NewBalance(in $) $1,026.61 1.75% $322.20 $300.00 Recall that the annual percentage rate (APR) is tied to the monthly periodic rate by the following formula. monthly periodic rate = APR 12 By solving this equation for the APR, the known value for the monthly periodic rate can be substituted to calculate the APR. APR = monthly periodic rate ✕ 12 The monthly periodic rate is given to be 1.75%. Find the APR. APR = 12 ✕ monthly periodic rate = 12 ✕ ____ % = ____%
Solve for the unknown interest rate in each of the following (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.):
Using the following information, determine the real rate of interest: Rate % inflation 0.53 T-bill 5.00 10y T-Bond 6.00 10y AAA Corporate 6.41 10y AA Corporate 7.52 note: your answer should be to 2 decimal places. So, if your answer is 3.253%, for example, then enter 3.25 without the percent sign.
What is the present value of $8,690 to be received at the end of each of 18 periods, discounted at 5% compound interest? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)
Suppose the spot rate and the 90-day forward rate on the Brazilian real are 3.3054 and 3.3263, respectively. If the three-month interest rate on dollars is .27%, what do you think is the three-month interest rate on the Brazilian real? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)