The time value of money takes all of the following into consideration EXCEPT a.Inflation b.the number of compounding periods per year c.The total number of years d. the present value of money
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The
a.Inflation
b.the number of compounding periods per year
c.The total number of years
d. the present value of money
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- The (blank) interest rate is referred to as APR and the (blank) interest rate is the true rate considering compounding periods per yearWhich of the following is a series of constant cash flows that occur at the end of each period for some fixed number of periods .... A. Annuity B. Mezzanine Debt C. Perpetuity D. Original InvestmentIn an inflationary period, what is the difference between (a) inflated dollars and “then-current” future dollars, and (b) “then-current” future dollars and constant-value future dollars?
- 2 Given a set of present value tables, an annual interest rate, the dollar amount of equal payments made, and the number of semiannual payments, what other information is necessary to calculate the present value of the series of payments? A. The future value of the annuity. B. The timing of the payments (whether they are at the beginning or end of the period). C. The rate of inflation. D. No other information is required.For the following exercise, use the compound interest formula, A(t) = P 1 + r n nt , where money is measured in dollars.After a certain number of years, the value of an investment account is represented by the expression 10,950 1 + 0.03 2 24 . How many years had the account been accumulating interest? yrA dollar today is worth more than a dollar to be received in the future. The difference between the presentvalue of cash flows and their future value represents the time value of money. Interest is the rent paid forthe use of money over time.
- A fixed stream of cash flows occurring at the beginning of each period for a fixed period of time is known as: Select one: a. Ordinary annuity b. Constant annuity c. Annuity due d. Financial annuityAssume that time is measured in years and that interest rates are constant. A cashflow of amount £1000 is paid each year, with the first payment made at time 1 and the last payment made at time 20. Using a constant effective interest rate of 3% per annum, calculate the present value at time 0 of the cashflows.For time value of money calculations (circle all that apply): Increasing i increases present value Increasing i increases future value More frequent compounding increases future value More frequent discounting increases present value n is always expressed in years
- For a sum of money invested at 11.5% compounded for 5 years state the following values. i) The number of compounding periods is =? ii) The periodic rate of interest is = %? iii) The compounding factor is (1+?)? iv) The numerical value of the compounding factor is =?The value of a sum after investing over one or more periods is calleda) Discount Valueb) Nonec) Compound and future valued) Present valueAn investment pays you 9% interest, compounded quarterly. What is the periodic rate of interest? What is the nominal rate of interest? What is the effective rate of interest?