Without calculating, explain which investment is better and why for a principal investment of $100: an investment offering a 5% simple interest rate vs. a 5% rate that is compounded monthly.
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- An investment of $3 Million erans interest of 9% compounded continuously. What is the effective rate of interest?Suppose that you can make an annual profit of $600 on an investment of $4000. Suppose you borrow the investment amount at an annual interest rate of 8%. Your updated expectation of inflation is 6%. Then your gross real returns (before loan payment) is _____ and your net real returns (after loan payment) is ______.Suppose that an investment promises to pay a real 9% annual rate of interest and inflation rate is 3%. What is the effective annual interest rate on this investment assuming that interest is compounded quarterly? PLEASE SHOW HOW YOU COMPUTE EACH OF THE ITEMS.
- 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? a. Paying of simple interest instead of compound interest b. paying and compounding interest on both the principal amount and earned interest each period c. Increasing the length of the investment period d. Increasing the interest rateAn investment will pay $725 in 2,3,4 and 5 years from now. Furthermore, it will pay $4,400 in 9, 10 and 11 years. What is the most you would pay for this investment if you require a 10% return? answer in dollars without the symbol.An investment will pay you $36,000 in 12 years. If the appropriate discount rate is 6.3 percent compounded daily, what is the present value? (Use 365 days a year. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
- An investment will pay you $86, 000 in three years. Assume the appropriate discount rate is 7.5 percent compounded daily. What is the present value? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Use 365 days in a year.Which of the following is the approximate internal rate of return for an investment that costs $33,550 and provides a $5,000 annuity for 10 years? A) 5% B) 6% C) 8% D) 10%The formula for continuous compound interest is A=Pe sqrt rt. How long did it take for an initial investment of $10,000 to grow to $12,000 at 2.6% annual interest? 
- An investment will pay you $96,000 in six years. Assume the appropriate discount rate is 7.5 percent compounded daily. What is the present value? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Use 365 days in a year.An investment will pay you $87,000 in five years. Assume the appropriate discount rate is 7.75 percent compounded daily. What is the present value? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Use 365 days in a year.)An investment earns an annual interest rate of 12 percent compounded quarterly. What is the effective annual rate?A. 3.00%.B. 12.00%. C. 12.55% Use excel
