n interest rate is 12% APR when measured using semiannual compounding. What is the equivalent rate when measured using continuous compounding? How much will $100 grow to in 3 years if it's invested at 12% APR with semiannual compounding? Is that more, less, or the same as it will grow to over the same period using the continuously compounding equivalent rate? Group of answer choices 11.33%; $140.49; same 11.33%; 140.49; less 11.65%; $141.85; same 11.65%; 141.85; less

n interest rate is 12% APR when measured using semiannual compounding. What is the equivalent rate when measured using continuous compounding? How much will $100 grow to in 3 years if it's invested at 12% APR with semiannual compounding? Is that more, less, or the same as it will grow to over the same period using the continuously compounding equivalent rate? Group of answer choices 11.33%; $140.49; same 11.33%; 140.49; less 11.65%; $141.85; same 11.65%; 141.85; less

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 8MC: Define the stated (quoted) or nominal rate INOM as well as the periodic rate IPER. Will the future...

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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%?
How much must be invested now to receive $30,000 for 10 years if the first $30.000 is received one year from now and the rate is 8%?
If you invest $15,000 today, how much will you have in (for further instructions on future value in Excel, see Appendix C): A. 20 years at 22% B. 12 years at 10% C. 5 years at 14% D. 2 years at 7%
How much would you invest today in order to receive $30,000 in each of the following (for further Instructions on present value In Excel, see Appendix C): A. 10 years at 9% B. 8 years at 12% C. 14 years at 15% D. 19 years at 18%
If the current rate of interest is 8% APR, then the future value of an investment that pays $250 per quarter and lasts 20 years is closest to: $48,443 $9936 $18,519 $20,000
If the current rate of interest is 8%, then the present value of an investment that pays $1000 per year and lasts 20 years is closest to: Group of answer choices $18,519 $20,000 $45,716 $9,818
An investment pays $2,100 per year for the first 4 years, $4,200 per year for the next 3 years, and $6,300 per year the following 7 years (all payments are at the end of each year). If the discount rate is 11.15% compounding quarterly, what is the fair price of this investment?Work with 4 decimal places and round your answer to two decimal places. For example, if your answer is $345.667 round as 345.67 and if your answer is .05718 or 5.718% round as 5.72. Group of answer choices $28,030.03 $26,178.99 $26,443.43 $31,467.68 $30,145.51
An investment offers $6,600 per year, with the first payment occurring one year from now. The required return is 5 percent. a. What would the value be today if the payments occurred for 10 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What would the value be today if the payments occurred for 35 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What would the value be today if the payments occurred for 65 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d. What would the value be today if the payments occurred forever? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Give your answer to this question correct to the nearest rand. Phindile invests R12 795,00 now and RX in eight months’ time. The investment earns interest at an interest rate of 11% per annum, compounded monthly. Phindile’s goal is to have R21 592,00 after one and a half year. What is the value of X? Explain the formulae used
An investment offers $9,200 per year for 17 years, with the first payment occurring one year from now. Assume the required return is 12 percent. a. What is the value of the investment today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What would the value be if the payments occurred for 42 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What would the value be if the payments occurred for 77 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d. What would the value be if the payments occurred forever? (Do not round