FV = | Future Value | |
PV = | Present Value | |
r = | rate of interest | |
n= | no of period | |
a) | PV = | FV/ (1 + r )^n |
PV = | 500 / ((1 + 6%/2)^10) | |
PV = | 372.05 | |
b) | PV = | FV/ (1 + r )^n |
PV = | 500 / ((1 + 6%/4)^20) | |
PV = | 371.24 | |
c) | PV = | FV/ (1 + r )^n |
PV = | 500 / ((1 + 6%/12)^12) | |
PV = | 470.95 | |
d) | The present value declines as periods per year increases | |
can you pleas answe this two question please eBook Problem Walk-Through Find the present value of...
Find the present value of $300 due in the future under each of these conditions: 13% nominal rate, semiannual compounding, discounted back 5 years. Do not round intermediate calculations. Round your answer to the nearest cent. $ 13% nominal rate, quarterly compounding, discounted back 5 years. Do not round intermediate calculations. Round your answer to the nearest cent. $ 13% nominal rate, monthly compounding, discounted back 1 year. Do not round intermediate calculations. Round your answer to the nearest cent....
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PLEASE ANSWER THIS TWO QUESTION THANK YOU Different compounding periods, are used for different types of investments. In order to properly compare investments or loans with different compounding periods, we need to put them on a common basis. In order to do this, you need to understand the difference between the nominal interest rate (INOM) and the effective annual rate (EAR). The nominal interest rate is quoted by borrowers and lenders, and it is also called the annual percentage rate...