For a ten-year investment, what level annual effective interest rate gives the same accumulation as an...
For a ten-year investment, what level annual effective interest rate gives the same accumulation as an annual effective interest rate of 4% for five years followed by an annual effective interest rate of 5% for ten years?
Homework Answers
![Home nert Page Layout Formulas Data Review View dd-Ins Cut Copy Σ AutoSum ー E ゴWrap Text ,_a. ars-函Merge & Center, $, % , 弼,8 C Paste B l u. Conditional Format CeInsert Delete Format Formatting, as Table w styles. ▼ ㆆ ▼ Sort &Find & 2 ClearFe Select Editing Format Painter Clipboard PL178 PK Font Alignment Number Styles Cells PL PM PN PO PQ PR PS PT PU PV 173 174 175 176 RATE FOR FIRST S YEARS RATE FOR NEXT 10 YEARS SUPPOSE PRESENT VALUE 4% 5% FUTURE VALUE AFTER 15 YEARS FUTURE VALUE1 (1+r1)An11+r2)An2 FUTURE VALUE1 *(1+0.04)5(1+0.05)A10 FUTURE VALUE 179 180 181 182 183 184 185 186 187 188 189 190 191 11 1 トーCALCULATOR ( LOAN OPTIONS | pv, fv, annuity i CAP STRU VALUE 1.981799375 NOW WE NEED TO HAVE SAME FUTURE VALUE BUT IN 10 YEARS AND NOT IN 15 YEARS SO FUTURE VALUE PRESENT VALUE (ASSUMED) NO OF YEARS RATE 1.981799375 10 7.08% [EXCEL-RATE(PP184,-PP183,PP182)] NOTE I HOPE SUM IS VERY CLEAR THAT WE HAVE TO FIND RATE WHICH MAKES FUTURE VALUE EQUAL FOR BOTH OPTIONS ONE, WITH 4% FOR 5 YEARS & 5% FOR 10 YEARS SECOND, SAME FUTURE VALUE BUT WITH SINGLE RATE AND IN 10 YEARS BOX DILUTION . DOLLAR COST AVG MORTGAGE. EXPO Sheet1 . Sheet2. She 福 130% rences: x261 09:58](http://img.homeworklib.com/questions/7d748b50-7190-11ea-9a6f-1985b5e03b20.png?x-oss-process=image/resize,w_560)
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For a ten-year investment, what level annual effective interest
rate gives the same accumulation as an...
7. The effective annual interest rate is 1 5%. What is the effective interest rate for...
7. The effective annual interest rate is 1 5%. What is the effective interest rate for two years (accumulated over 2 years with interest over interest)? What is the effective interest rate for ten years (accumulated over 10 years with interest over interest)? a. b. c. Assume interest is compounded monthly. What is the monthly interst rate? d. What is the simple annual interest rate? e. What is the simple interest rate for 2 years? For 10 years?
2. What nominal annual interest rate compounded monthly is equivalent to an effective annual interest rate...
2. What nominal annual interest rate compounded monthly is equivalent to an effective annual interest rate of 8% per year for the first 10 years followed by a nominal annual interest rate of 5% compounded daily for the second 10 years? Give your answer as a percent rounded to three decimal places. Answer:
4. Two accounts with the same quoted annual interest rate (APR) would have: A) same effective...
4. Two accounts with the same quoted annual interest rate (APR) would have: A) same effective annual rate (EAR) if they have different compounding periods in a year B) same effective annual rate (EAR) ifthey have same compounding periods in a year C) same effective annual rate (EAR) if one compounds the interest more often than the other D) different effective annual rate (EAR) if they have same compounding periods in a year
answer :4.78740% please no excel or actuarial calculator 4) A twenty-year loan of $25,000 is negotiated with the borrower agreeing to repay principal and interest at 5%. A level payment of $ 1 ,500 w...
answer :4.78740%
please no excel or actuarial calculator
4) A twenty-year loan of $25,000 is negotiated with the borrower agreeing to repay principal and interest at 5%. A level payment of $ 1 ,500 will apply during the first ten years, and a higher level payment will apply over the remaining ten years. Each time the lender receives a payment from the borrower, he will deposit the portion representing principal into a sinking fund with an annual effective interest rate...
Suppose that the nominal annual interest rate on an investment is 12%. Calculate the effective interest...
Suppose that the nominal annual interest rate on an investment is 12%. Calculate the effective interest rate if compounding occurs continuously. Suppose that the nominal annual interest rate on an investment is 12% Calculate the effective interest rate if compounding occurs monthly.
6. (17) What is the annual effective interest rate on an investment that has earnings including...
6. (17) What is the annual effective interest rate on an investment that has earnings including payback of the original investment over 18 months paid at the end of the month listed shown in the table below given the investment required $12,000 to acquire on January 1 of the first year? 2 2 2 2 2 1 1 June Year May 1900 April 2500 March January 600 December October April 1500 2000 February 1200 Month 1700 1600 1500 Earnings
6....
6. (17) What is the annual effective interest rate on an investment that has earnings including...
6. (17) What is the annual effective interest rate on an investment that has earnings including payback of the original investment over 18 months paid at the end of the month listed shown in the table below given the investment required $12,000 to acquire on January 1 of the first year? 2 2 2 2 2 1 1 June Year May 1900 April 2500 March January 600 December October April 1500 2000 February 1200 Month 1700 1600 1500 Earnings
6....
1. If the nominal interest rate of is 2% per quarter, what is the nominal rate...
1. If the nominal interest rate of is 2% per quarter, what is the nominal rate per year ? 2. $100 of interest is paid each month on an investment of $10000, if the interest is compounded monthly at the end of 2 years, what is the accumulation at the end of two years ? 3. An individual wishes to deposit an amount of money now to have an accumulation of $500 at the end of five years. If the...
What is the annual effective interest rate on an investment that has earnings including payback of...
What is the annual effective interest rate on an investment that has earnings including payback of the original investment over 18 months paid at the end of the month listed shown in the table below given the investment required $12,000 to acquire on January 1 of the first year? Year 1 1 1 2 2 2 2 2 2 Month February April October December January March April May June Earnings 1200 1500 1500 1600 600 1700 2500 1900 2000
a. If you are told that your effective annual interest rate is 10%, what is the nominal...
a. If you are told that your effective annual interest rate is 10%, what is the nominal interest rate compounded quarterly? b. What is the effective annual interest rate if the nominal interest rate is 7%, and the frequency of compounding is once a month? c. How much time would it take for your principal to quadruple if the effective annual interest rate is 5%, and the frequency of compounding is once a year?
7. The effective annual interest rate is 1 5%. What is the effective interest rate for two years (accumulated over 2 years with interest over interest)? What is the effective interest rate for ten years (accumulated over 10 years with interest over interest)? a. b. c. Assume interest is compounded monthly. What is the monthly interst rate? d. What is the simple annual interest rate? e. What is the simple interest rate for 2 years? For 10 years?
2. What nominal annual interest rate compounded monthly is equivalent to an effective annual interest rate of 8% per year for the first 10 years followed by a nominal annual interest rate of 5% compounded daily for the second 10 years? Give your answer as a percent rounded to three decimal places. Answer:
4. Two accounts with the same quoted annual interest rate (APR) would have: A) same effective annual rate (EAR) if they have different compounding periods in a year B) same effective annual rate (EAR) ifthey have same compounding periods in a year C) same effective annual rate (EAR) if one compounds the interest more often than the other D) different effective annual rate (EAR) if they have same compounding periods in a year
answer :4.78740%
please no excel or actuarial calculator
4) A twenty-year loan of $25,000 is negotiated with the borrower agreeing to repay principal and interest at 5%. A level payment of $ 1 ,500 will apply during the first ten years, and a higher level payment will apply over the remaining ten years. Each time the lender receives a payment from the borrower, he will deposit the portion representing principal into a sinking fund with an annual effective interest rate...
Suppose that the nominal annual interest rate on an investment is 12%. Calculate the effective interest rate if compounding occurs continuously. Suppose that the nominal annual interest rate on an investment is 12% Calculate the effective interest rate if compounding occurs monthly.
6. (17) What is the annual effective interest rate on an investment that has earnings including payback of the original investment over 18 months paid at the end of the month listed shown in the table below given the investment required $12,000 to acquire on January 1 of the first year? 2 2 2 2 2 1 1 June Year May 1900 April 2500 March January 600 December October April 1500 2000 February 1200 Month 1700 1600 1500 Earnings
6....
6. (17) What is the annual effective interest rate on an investment that has earnings including payback of the original investment over 18 months paid at the end of the month listed shown in the table below given the investment required $12,000 to acquire on January 1 of the first year? 2 2 2 2 2 1 1 June Year May 1900 April 2500 March January 600 December October April 1500 2000 February 1200 Month 1700 1600 1500 Earnings
6....
1. If the nominal interest rate of is 2% per quarter, what is the nominal rate per year ? 2. $100 of interest is paid each month on an investment of $10000, if the interest is compounded monthly at the end of 2 years, what is the accumulation at the end of two years ? 3. An individual wishes to deposit an amount of money now to have an accumulation of $500 at the end of five years. If the...
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