(2a) How would an increase in the interest rate (i) affect the future value of a...
(2a) How would an increase in the interest rate (i) affect the future value of a sum of money? (2b) How would an increase in the interest rate (i) affect the present value of a sum of money? Explain why this would happen.
Homework Answers
(2a) (I) Increase in interest rates will compound the future value to a Higher sum of money as the more interest rate is paid , the more the future value will grow , due to the compounding concept as you can figure out in bank deposits. A bank deposit will grow higher with Higher interest..
(2b) (1) The increase in interest rate will diminish the present value of money, this is because as we apply the higher interest, the future sum of money get discounted with Higher interest so This is because of the principles of Discounting that higher rate of interest will diminish the present value of a sum of money.
Add Answer to:
(2a) How would an increase in the interest rate (i) affect the
future value of a...
Using higher interest rates will not affect the future value of the investiment. increase the future...
Using higher interest rates will not affect the future value of the investiment. increase the future value of any investment. decrease the future value of any investment. None of the answers provided.
What happens to a future value as you increase the interest rate? The future value remains...
What happens to a future value as you increase the interest rate? The future value remains unchanged if you increase the interest rate. Sometimes the future value gets larger and sometimes it gets smaller when you increase the interest rate. The future value gets larger as you increase the interest rate. The future value gets smaller as you increase the interest rate.
Future Value of Account A Note: Account A pays simple interest. Future Value Principal + Interest...
Future Value of Account A Note: Account A pays simple interest. Future Value Principal + Interest Principal + [(Principal x Interest Rate) x Investment Period] $2,000 + [($2,000 x 6%) x 3 years] Future Value of Account X Note: Account X pays compound interest. Future Valuex = Present Value x Interest Rate Factor Present Value x (1 + Interest Rate)N $2,000 (1 + 0.06)3 $ To find the interest rate factor, you can use four different ways, including multiplying it...
4. (a) How would you expect each of the following to affect the demand for money...
4. (a) How would you expect each of the following to affect the demand for money for the economy? Explain. (i) There is an increase in the competition among brokers, resulting in a lower commission charge for selling or holding of bonds or stocks. (ii) Financial investors become more concerned about increasing riskiness of stocks. (iii) The economy enters a boom period. (iv) Nominal interest rate increases. (b) For each of the scenarios described in (a), what will happen to...
2. (Chapter 5 - Income Effect) Give two reasons why the increase in income would affect...
2. (Chapter 5 - Income Effect) Give two reasons why the increase in income would affect the demand for money. Would this also affect interest rate? Draw an appropriate diagram to explain.
2. (Chapter 5 - Income Effect) Give two reasons why the increase in income would affect...
2. (Chapter 5 - Income Effect) Give two reasons why the increase in income would affect the demand for money. Would this also affect interest rate? Draw an appropriate diagram to explain.
Time Value of Money In solving these problems please use Excel formulas of the time value of money valuation including : Present Value / PV, Future Value / FV, interest Rate / Rate, Number of periods...
Time Value of Money In solving these problems please use Excel formulas of the time value of money valuation including : Present Value / PV, Future Value / FV, interest Rate / Rate, Number of periods / NPER First National Bank TIME VALUE OF MONEY ANALYSIS You have applied for a job with a local bank. As part of its evaluation process, you must take an examination on time value of money analysis covering the following questions: 1. Draw time...
10. Problem 5.10 (Present and Future Values for Different Interest Rates) eBook Find the following values....
10. Problem 5.10 (Present and Future Values for Different Interest Rates) eBook Find the following values. Compounding/discounting occurs annually. Do not round intermediate calculations. Round your answers to the nearest cent. a. An initial $800 compounded for 10 years at 8%. b. An initial $800 compounded for 10 years at 16%. c. The present value of $800 due in 10 years at 8%. $ d. The present value of $2,300 due in 10 years at 16% and 8%. Present value...
a/ Explain how expectation about future price and income will affect consumtion b/ Explain how expectation...
a/ Explain how expectation about future price and income will affect consumtion b/ Explain how expectation about future sale will affect investment c/ How will an increase in money supply affect aggregate demand
Calculate the interest rate and future value. ALL ANSWERS MUST BE IN EXCEL FORMULA FORMAT In...
Calculate the interest rate and future value.
ALL ANSWERS MUST BE IN EXCEL FORMULA FORMAT
In 1895, the first U.S. Putting Green Championship was held. The winner's prize money was $150. In 2010, the winner's check was $1,350,000. What was the percentage increase per year in the winner's check over this period? If the winner's prize increases at the same rate, what will it be in 2040? $ 150 Present value Years Future value $ 115 1,350,000 Years 30 Complete...
Using higher interest rates will not affect the future value of the investiment. increase the future value of any investment. decrease the future value of any investment. None of the answers provided.
What happens to a future value as you increase the interest rate? The future value remains unchanged if you increase the interest rate. Sometimes the future value gets larger and sometimes it gets smaller when you increase the interest rate. The future value gets larger as you increase the interest rate. The future value gets smaller as you increase the interest rate.
Future Value of Account A Note: Account A pays simple interest. Future Value Principal + Interest Principal + [(Principal x Interest Rate) x Investment Period] $2,000 + [($2,000 x 6%) x 3 years] Future Value of Account X Note: Account X pays compound interest. Future Valuex = Present Value x Interest Rate Factor Present Value x (1 + Interest Rate)N $2,000 (1 + 0.06)3 $ To find the interest rate factor, you can use four different ways, including multiplying it...
2. (Chapter 5 - Income Effect) Give two reasons why the increase in income would affect the demand for money. Would this also affect interest rate? Draw an appropriate diagram to explain.
2. (Chapter 5 - Income Effect) Give two reasons why the increase in income would affect the demand for money. Would this also affect interest rate? Draw an appropriate diagram to explain.
10. Problem 5.10 (Present and Future Values for Different Interest Rates) eBook Find the following values. Compounding/discounting occurs annually. Do not round intermediate calculations. Round your answers to the nearest cent. a. An initial $800 compounded for 10 years at 8%. b. An initial $800 compounded for 10 years at 16%. c. The present value of $800 due in 10 years at 8%. $ d. The present value of $2,300 due in 10 years at 16% and 8%. Present value...
Calculate the interest rate and future value.
ALL ANSWERS MUST BE IN EXCEL FORMULA FORMAT
In 1895, the first U.S. Putting Green Championship was held. The winner's prize money was $150. In 2010, the winner's check was $1,350,000. What was the percentage increase per year in the winner's check over this period? If the winner's prize increases at the same rate, what will it be in 2040? $ 150 Present value Years Future value $ 115 1,350,000 Years 30 Complete...
Most questions answered within 3 hours.
-
Based on the range, which of the following sets of scores has
the greatest variability? 3,...
asked 52 minutes ago -
Ripples in a pond travel at a velocity of 3 m/s with one peak
passing a...
asked 42 minutes ago -
A man stands on the roof of a building of height 13.0 mm and
throws a...
asked 48 minutes ago -
The extent to which assets are financed by borrowed funds and
other liabilities is indicated by:...
asked 1 hour ago -
Explain in detail
Germany is the fifth largest economy
explain what goods and services Germany specializes...
asked 2 hours ago -
The density of platinum is 21.45 g/mL. If a cube of platinum
with a mass of...
asked 2 hours ago -
Accounts Receivable
Sales
A/R Posting
Extended Sales Invoice
Packing Slip
Compare invoice to packing slip 2...
asked 2 hours ago -
Michaella, age 23, is a full-time law student and is claimed by
her parents as a...
asked 2 hours ago -
Why are polymers not typically casted into products?
asked 2 hours ago -
When rolling a die 129 times, what is the probability of rolling
a 6 no more...
asked 2 hours ago -
4. A call option currently sells for $7.75. It has a strike
price of $85 and...
asked 2 hours ago -
1.
You need to prepare 10.0 liters of an acid aqueous solution with a
pH of...
asked 2 hours ago