What is the present value of $ 1, 552.90 due in 10 years at (1) a 12 percent discount rate and (2) a 6 percent rate? PV - Different Interest Rates
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- Define the stated (quoted) or nominal rate INOM as well as the periodic rate IPER. Will the future value be larger or smaller if we compound an initial amount more often than annually—for example, every 6 months, or semiannually—holding the stated interest rate constant? Why? What is the future value of $100 after 5 years under 12% annual compounding? Semiannual compounding? Quarterly compounding? Monthly compounding? Daily compounding? What is the effective annual rate (EAR or EFF%)? What is the EFF% for a nominal rate of 12%, compounded semiannually? Compounded quarterly? Compounded monthly? Compounded daily?(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%?1. Determine the discount rate assuming the PV of $1080 at the end of 1-year is $980? 2. $9,800 is deposited for 10 years at 6% compounded annually, determine the FV? 3. What will be the present value, if $6,800 is discounted back 4 years at an interest rate of 4% compounded semi-annually
- What's the present value of $12,000 discounted 5 years if the appropriate interest rate is 4.5%, compounded semiannually? $7,205 $9,606 $9,702 $9,030 $10,736What is the present value of $6,700 received 14 years from now using a 11% interest or discount rate, with interest compounded quarterly?What is the present value of 600 TL which will be invested at the end of each year during the next 12 years? Discount rate is 3%.6.345,96 TL4.632,785.972,4 TL9.623,478.515,2 TL.
- What's the present value of $1,515 discounted back 5 years if the appropriate interest rate is 6.6%, compounded monthly? Group of answer choices $1,090 $979 $1,033 $1,132 $928What is the present value of $30,000 in 27 years discounted at 9 percent interest rate?7.If $1000 is deposited at 12.5% p.a. for one year, what is the effective annual interest rate if interest is compounded quarterly? Select one: a. 13.10% b. 12.50% c. 13.03% d. 13.05%
- The present value of $121,000 expected one year from today at an interest rate (discount rate) of 10 percent per year is A.100,000 B.110,000 C.121,000 D.108,900What's the present value of $14,000 discounted back 5 years if the appropriate interest rate is 4.5%, compounded semiannually? a. $9,024.59 b. $9,014.99 c. $9,005.39 d. $9,034.19 e. $9,043.79If $1000 becomes $1,811.36 after 5 years when invested at an unknown rate of interest compounded quarterly, determine the unknown nominal rate and the corresponding effective rate.