7. The effective annual interest rate is 1 5%. What is the effective interest rate for...
5.You own a plant producing oil. On 2017 the plant produced a quantity of 2,500 barrels of oil. The market price of a barrel of oil at 1.1.2018 is $50. Assume the plant's oil production is perpetual (lasts forever), all cash flows are received at the end of the year and the annual interest rate is 8%. Calculate the plant's economic value at 1.1.2018 under the following scenarios. (The plant's value is equal to the present value of all the...
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:
2.30 For a 15 percent effective annual interest rate, what is the nominal interest rate if (a) Interest is compounded monthly? (b) Interest is compounded daily (assume 365 days per year)? (c) Interest is compounded continuously?
1, Compute the effective rate of interest (APY) if the stated rate is 5% per year, o ompounded aemi- m 2 ( 1.015) 1-1 .0500625- 0 0 500 615 IreRE 5.00625% (b) compounded quarterly (c) compounded monthly (d) compounded daily 2. Find the present value of an investment worth $10000 in eight years, with interest rate 6% compounded monthly. 3, You have an opportunity to invest some money in an account earning 3% interest, compounded continuously. How much should you...
Assume that nominal effective interest i(12) = .03. Find ? a) Annual effective interest rate i ? b) Monthly effective interest rate j ? c) Nominal interest rate i(52) compounded weekly. ? d) Nominal discount rate d(365) compounded daily.
Problem 2.2 Effective interest rate Given: The nominal interest rate is 7%. You wish to know the difference in the frequency of compounding Find: The effective (annual) interest rate if the nominal interest rate of 7% is compounded (a) quarterly, (b) monthly, (c) weekly, (d) daily, and (e) continuously. Solution:
Problem 2.2 Effective interest rate Given: The nominal interest rate is 7%. You wish to know the difference in the frequency of compounding Find: The effective (annual) interest rate if the nominal interest rate of 7% is compounded (a) quarterly, (b) monthly, (c) weekly, (d) daily, and (e) continuously. Solution
3) What is the effective monthly interest rate for a loan with a 12% nominal annual interest rate if the loan is compounded (a) semi-annually, (b) monthly, or (c) continuously? (to 5 decimal places)
If the APR for a car loan is 5%, what is the effective annual interest rate (in %) if interest on the loan is compounded monthly and you have biweekly payments? Is the answer 0.20812%?
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?