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How long will it take to double your investment if the interest rate is r=0.06 (r=6%)?
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- How long will it take to increase your investment by 2.5 times if the interest rate is r=0.14 (r=14%)?What is the present value for a future value of FV=$500,000 at time t=36 if the interest rate is r=0.05 (e.g., r=5%)? What is the interest rate “r” if PV=$100 and the FV=$350 in year t=12? What is the interest rate “r” if PV=$1250 and the FV=$2150 in year t=10? How long will it take to double your investment if the interest rate is r=0.06 (r=6%)? How long will it take to increase your investment by 2.5 times if the interest rate is r=0.14 (r=14%)? Which is the better option if the interest rate is r=0.10 (r=10%)? Show all work used to arrive at your answer. a. Option I: Receive $1000 today at time t=0. b. Option II: Receive $1615 at time t=5.10) Which is the better option if the interest rate is r=0.07 (r=7%)? Show all work used to arrive at your answer. a. Option I: Receive $510 today at time t=0. b. Option II: Receive $1000 at time t=10.If you are promised a nominal return of 16%, on a one-year investment, and you expect the rate of inflation to be 2%, what real rate do you expect to earn? Use the Fisher equation, NOT the approximation.
- How many years will it take for an investment to double itself if the interest rate is 10%?Suppose the risk-free interest rate is 4.6%. Having $600 today is equivalent to having what amount in one year? (Round to the nearestcent.) Having $600 in one year is equivalent to having what amount today? (Round to the nearestcent.) Which would you prefer, $600 today or $600 in one year? Does your answer depend on when you need the money? Why or why not? (Round to the nearestcent.)Suppose you can borrow money at an annual interest rate of 8% but can save money at an annualinterest rate of only 5%. If you start with zero capital and if the yearly cash ows of an investment are-1000; 900; 800;-1200; 700should you invest?
- What is the no arbitrage price of a risk-free investment that promises to pay $1,000 in one year? The risk-free interest rate is 3.5%. If you can purchase the investment for $950, do you have an arbitrage opportunity?What is the relationship between the value of an annuity and the level of the interest rate? Suppose you just bought a 10 year annuity of $5,200 per year at a current interest rate of 10% per year. What happens to the value of your investment if interest rates suddenly dropped to 5%? What is the what if interest rates suddenly rise to 15%?What is the present value of an investment that will pay $1,000 in one year's time, and $1,000 every year after that, when the interest rate is 8%?
- Assume you are investing $10,000 today for a given amount of time at a given interest rate. What would DECREASE the total amount of money at the end of the investment period?Suppose the interest rate is 3.6% b. Having $650 in one year is equivalent to having what amount today? c. Which would you prefer, $650 today or $650 in one year? Does your answer depend on when you need the money? Why or why not? **round to the nearest cent**How long will it take for an investment to double in value if it earns 5% compounded continuously?