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Essentials Of Investments
11th Edition
ISBN: 9781260316193
Author: Bodie
Publisher: MCG
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Suppose the risk - free interest rate is 4.2%.a. Having $200 today is equivalent to having what amount in one year?b. Having $200 in one year is equivalent to having what amount today?c. Which would you prefer, $200 today or $200 in one year? Does your answer depend on when you need the money? Why or why not?a. Having $200 today is equivalent to having what amount in one year?Having $200 today is equivalent to having Sin one year. (Round to the nearest cent.)
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**round to the nearest cent**
To estimate when your money will be worth half of what it is worth today, divide 72 by the expected average annual rate of inflation. If the long-term annual rate of inflation is 3%, in how many years will your money be worth half of its current value? What if the average annual inflation rate increases to 4%?
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- If your real rate of return is 2% and the inflation rate is 3%, what is the nominal rate of return?arrow_forwarda) 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?arrow_forward4. The present value of a growing perpetuity, with cash flow C1 occurring one year from now, is given by: [C1/(r - g)], where r > g. True or False ? 5. An equal-payment home mortgage is an example of an annuity. True or False?arrow_forward
- You borrow P dollars now. You will pay back your debt by paying an annuity of A dollars for each of n periods into the future. Suppose m < n and that you have made your first m payments of A dollars. How much do you owe after making the mth payment.arrow_forwardAn annuity, and an annuity due, with the same number of payments have the same future value if r = 10%. Which one has the higher payment?arrow_forwardYou have an annuity that pays $15 per year for 61 years. What is the future value (FV) of this annuity at the end of that 61 years given that the discount rate is 10%? Must use excel or finance calculator m Nper (or N) =n*m Rate (or I/Y)=i/m PV PMT FVarrow_forward
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What is an Annuity? Are Annuities a Good Investment? Basics of an Annuity, a Whiteboard Animation; Author: Learn to invest;https://www.youtube.com/watch?v=Wq7nq8Gx78w;License: Standard YouTube License, CC-BY