Question
show all work
compounding effect will result in a higher future value with more frequent compounding 9. (a) Assume that you have borrowed $
0 0
Add a comment Improve this question Transcribed image text
Answer #1

89 Ta) Borrowed $ 1o00 for 2years Interest rate 12 pia 1000 x 12.1 X Monthly Int. on loan = $10 (b) Annual imt.exp. 1000x12-1

Add a comment
Know the answer?
Add Answer to:
show all work compounding effect will result in a higher future value with more frequent compounding...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Please answer both parts to question 9 especially part b. And please show work :) 9....

    Please answer both parts to question 9 especially part b. And please show work :) 9. (a) Assume that you have borrowed $1.000 for 2 years and you have an annual interest rate of 12% (annually compounded). What is the monthly payment due on the loan? (1 point) (b) Switch gears here and now assume that the payments are made annually. What is the annual interest expense for the borrower, and the annual interest income for the lender, during Year...

  • (a) Assume that you have borrowed $1,000 for 2 years and you have an annual interest...

    (a) Assume that you have borrowed $1,000 for 2 years and you have an annual interest rate of 12% (annually compounded). What is the monthly payment due on the loan? (1 point) (b) Switch gears here and now assume that the payments are made annually. What is the annual interest expense for the borrower, and the annual interest income for the lender, during Year 1? (Hint: Go to the TVM lecture notes for multiple cash flows and go to slide...

  • 9. (a) Assume that you have borrowed $1,000 for 2 years and you have an annual...

    9. (a) Assume that you have borrowed $1,000 for 2 years and you have an annual interest rate of 12% (annually compounded). What is the monthly payment due on the loan? (b) Switch gears here and now assume that the payments are made annually. What is the annual interest expense for the borrower, and the annual interest income for the lender, during Year 12 (Hint: Go to the TVM lecture notes for multiple cash flows and go to slide 15.)

  • Changing compounding frequency Using annual, semiannual, and quarterly compounding periods, (1) calculate the future value if...

    Changing compounding frequency Using annual, semiannual, and quarterly compounding periods, (1) calculate the future value if $6,000 is deposited initially at 11% annual interest for 7 years, and (2) determine the effective annual rate (EAR) Annual Compounding (1) The future value, Vn, is (Round to the nearest cent.) 2) If the 11% annual nominal rate is compounded annually the EAR is 96 Round to two decimal places Semiannual Compounding (1) The future value, Vn, is (Round to the nearest cent.)...

  • Changing compounding frequency Using annual, semiannual, and quarterly compounding periods, (1) calculate the future value if...

    Changing compounding frequency Using annual, semiannual, and quarterly compounding periods, (1) calculate the future value if $4,000 is deposited initially at 1 1% annual interest for 6 years, and (2) determine the effective annual rate (EAR) (1) The future value, FVn is (Round to the nearest cent) (2 If the 11% annual nominal rate is compounded annually, the EAR is 96 Round to two decimal places. (1) The future value, FVn, is S(Round to the nearest cent.) (2) If the...

  • MUST SHOW ALL WORK (3 pictures) 7. (a) Will the future value be larger or smaller...

    MUST SHOW ALL WORK (3 pictures) 7. (a) 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? Explain your answer. (2 points) (b-1) What is the future value of $200 after three years under 12% semiannual compounding? (1 point) (b-2) What is the effective annual rate for 12% interest with semiannual compounding? Be sure to show your EAR...

  • 9. (a) Assume that you have borrowed $1,000 for 2 years and you have an annual...

    9. (a) Assume that you have borrowed $1,000 for 2 years and you have an annual interest rate of 12% (annually compounded). What is the monthly payment due on the loan? (1 point)

  • Show the excel formulas used and answer all questions Ex. 1 You have $5,000 in your...

    Show the excel formulas used and answer all questions Ex. 1 You have $5,000 in your savings account that pays 4% interest. How much will you have in your account after 20 years, a) if your bank pays annually compounded interest? b) if your bank pays monthly compounded interest? c) if your bank pays daily compounded interest? Current balance Interest Years Compounding Annually Monthly Daily a) FV b) FV c) FV Ex. 2 If you need $10,000 in 7 years...

  • please show all work 10. Continuous Compounding Compute the future value of $1,625 continuously compounded for...

    please show all work 10. Continuous Compounding Compute the future value of $1,625 continuously compounded for a. Five years at an annual percentage rate of 14 percent. b. Three years at an annual percentage rate of 6 percent. c. Ten years at an annual percentage rate of 8 percent d. Eight years at an annual percentage rate of 9 percent CHAPTER

  • 5) a) What is the present value of $40 earned 2-years from now if compounding was...

    5) a) What is the present value of $40 earned 2-years from now if compounding was semi-annual and the interest rate is annually 3%? A "black box" just paid $20, which is expected to grow by 3% when the interest rate is 7% forever, what is the present value of this "black box" b) What is the future value of an annuity due with a $15 cash flow, 4% annual interest with quarterly compounding three-years from now? c) d) If...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT