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- (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%?Complete the table below by computing for the unknown component of a general annuity. PMT r t Payment interval Compounding period FV PV 1.P900 6% 6.25 yrs. Monthly quarterly ? 2.P1800 11% 8 yrs. Quarterly monthly ? 3.P500 5% 8 yrs. Monthly annually ?A payment stream that pays a continous rate of 1000+50t at time t is received from time 5 to 10 years. The force of interest from time 0 to time 5 is 0.06 and the force of interest from time 5 to 10 years is 0.04. Calculate the present value of payment stream
- In a discount interest loan, you pay the interest payment up front. For example, if a 1-year loan is stated as $34,000 and the interest rate is 9.50%, the borrower “pays” 0.0950 × $34,000 = $3,230 immediately, thereby receiving net funds of $30,770 and repaying $34,000 in a year. A. What is the effective interest rate on this loan? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) B. What is the effective annual rate on a 1-year loan with an interest rate quoted on a discount basis of 19.50%? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)2. Assuming that you obtain a bank loan for 500,000 with an annual interest payment of 10% of the principal. Compute for the present value under the following independent scenarios: a. Effective rate is 10% b. Effective rate is 8% c. Effective rate is 12%What is the PV of an ordinary annuity with 10 payments of $2,700 if the appropriate interest rate is 5.5%? $16,576 $17,449 $18,367 $19,334 $20,352
- What is the present value annuity due of RM4,500 with a 6 percent discount rate for 5 years? Select one: a. RM24,165.790 b. RM24,318.345 c. RM24,126.590 d. RM20,093.15An amount of P14,000 is borrowed at a discount rate of 10%, find the proceeds if the length of the loan is 180 days. a. P13,300 b. P13,000 c.P12,600 d. P12,200What is the future value annuity due of RM34,560 for the next 10 years with a discount rate of 12%? Select one: a. RM413,790.456 b. RM679,233.945 c. RM413,090.678 d. RM415,879.901
- Use the formula A = P(1 + rt) to calculate the maturity value of the simple interest loan. (Round your answer to two decimal places.) P = $2600, r = 9.4%, t = 5 monthsYou purchase a three-month discount security (e.g., a Treasury bill or commercial paper) for $0.9878 on $1 (i.e., $98,780 for $100,000 face amount). What are the discount yield, the simple annual yield, and the annual compound yield earned by the investment?Q7. The annual payment of alorry is 40, 000 Euro find out theloan amount which is granted for4 years and the interest rate is8%, prepare an amortizationtable for this loan
