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The present value interest factor for a dollar on hand today is 0.
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- What is the uninflated present worth of a ₱200,000 future value in two years if the average inflation rate is 6% and interest rate is 10%.Assume inflation is 2.60% and the nominal (annual) interest rate is 6.35%. If the interest rate is held constant, but inflation rises to 5.25%, does it cost more or less in real terms to borrow money than when the inflation rate was 2.60%? Explain your answer and make sure to include your real interest rates in both situation.The risk-free rate on T-bills recently was 1.23%. If the real rate of interest is estimated to be 0.80%, what was the expected level of inflation?
- 8. If the concern is for the value that existing money will have next year, the formula for the intertemporal value of money can be expressed as follows: Next Year's Value = Present Value (1 + r). For example, if the interest rate is 10% and the present value is $100, the $100 will increase to $110 at the end of a year. a. Using this algebraic expression, show the formula for the present value of future income and calculate what $200 received next year is worth now. b. What is the present value of $100 received 2 years from now?Which of the following annual cashflows has the lowest net present value if the discount rate is 10%? Question 20 options: $100; $100; $100; $100 $0; $0; $0; $400 $350; $0; $0; $0 $50; $50; $50; $375Not too long ago, interest rates were essentially zero. If interest rates fall to 1/100th of a basis point (r = 0.000001), which of the following is true (if we round to the nearest dollar)? Select all that are true. A) the present value of the annuity will equal the sum of the annuity cash flows B) the future value of the annuity will equal the sum of the annuity cash flows C) the present value of the annuity will equal the future value of the annuity D) annuity values cannot be solved at a rate of 0.0001%
- a) You invest 155 000 TL for a year. At the end the year, you have 174 375 TL net in your account. If the inflation realizes at %10 fot this year, calculate real rate of return? Can real interest rates be negative? Give a simple example?Assume that in 2020, a Liberty Seated half dollar issued in 1890 was sold for $197,000. What was the rate of return on this investment?You want to earn a real rate of return of 6.50% at a time when the inflation rate is 3.25%. What is the approximate nominal rate that you must earn?
- what is present value of perpetuity if annual coupon is $1,000 and discount rate is 10%Given the cash flows in actual dollars provided in the following table, convert the cash flows to equivalent cash flows in constant dollars if the base year is time 0. Assume that the market interest rate is 16% and that the general inflation rate(f) is estimated at 4% per year. n Cash Flow (In Actual Dollars) 0 $20,5004 $41,5005 $36,5007 $55,500Calculate Present Values For each of the following, compute the present value: Present Value Years Interest Rate Future Value 6 7% $13,827 11 15 43,852 19 11 725,380 29 18 590,710