Homework Answers
Annual compounding period will yield the least level of effective annual rate because the in the rest of other parts the principal got compunded more than one time leading to a higher effective interest rate. .
Effective annual rate = (1 + r/n)^nt -1) ×100
You can also use this formula and try.
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Question 25 of 25 Question 25 4 points Save Answer Which one of the following compounding...
PARTI: MULTIPLE CHOICE-Choose the letter of the most correct answer for each question. Record only one...
PARTI: MULTIPLE CHOICE-Choose the letter of the most correct answer for each question. Record only one answer per question. 1. Which following statement is true, assuming an interest rate of greater than 0% a. The present value of a dollar to be received one year from today is ALWAYS worth more than one dollar. b. The present value of a dollar to be received one year from today is ALWAYS worth less than one dollar. c. The present value of...
Which one of the following is true?(rounding to the nearest hundredths)
Question 22 Which one of the following is true?(rounding to the nearest hundredths) You invest $100 today. If you earn 2% per quarter, the annual percentage rate is 6%. The effective annual rate of 6% compounded continuously is 6.4%. If the monthly rate is 0.2%, the annual percentage rate is 1.2% If the APR is 12% with daily compounding, effective annual rate is 12.75%If the annual percentage rate is 12% with quarterly compounding, then the period rate is 4% per quarter.Question 23 Solve for the unknown...
Exercise 2. The 6-month, 12-month. I 8-month, and 24-month zero rates are 4%, 4.5%, 4.75% and 5%, with continuous compounding (a) What are the rates with semi-annual compounding? (c) Forward rates ar...
Exercise 2. The 6-month, 12-month. I 8-month, and 24-month zero rates are 4%, 4.5%, 4.75% and 5%, with continuous compounding (a) What are the rates with semi-annual compounding? (c) Forward rates are rates of interest implied by current zero rates for periods of time in the future. Calculate the forward rate for year 2, i.e. the rate for the period of time between the end of 12-month and the end of 24-month. (d) Consider a 2-year bond providing semiannual coupon...
Previous Page Next Page Page 4 of 30 Question 4 (3.3 points) Which of the following statements is most correct? Th...
Previous Page Next Page Page 4 of 30 Question 4 (3.3 points) Which of the following statements is most correct? The first payment under a 3-year, annual payment, amortized loan for $1,000 will include a smaller percentage (or fraction) of interest if the interest rate is 5 percent than if it is 10 percent. If you are lending money, then, based on effective interest rates, you should prefer to lend at a 10 percent nominal, or quoted, rate but with...
Question 9 A nominal annual rate which indicates a compounding frequency: Select one: A. Allows us...
Question 9 A nominal annual rate which indicates a compounding frequency: Select one: A. Allows us to determine the effective rate for any smaller period less than a year, by simply dividing the annual rate by the number of those smaller periods that occur in a year. B. Allows us to determine the effective rate for the period that matches the compounding frequency, by dividing the annual rate by the number of times interest compounds in a year. C. Makes...
3. Nonannual compounding period The number of compounding periods in one year is called compoundi...
3. Nonannual compounding period The number of compounding periods in one year is called compounding frequency. The compounding frequency affects both the present and future values of cash flows An investor can invest money with a particular bank and earn a stated interest rate of 13.20%; however, interest will be compounded quarterly. What are the nominal, periodic, and effective interest rates for this investment opportunity? Interest Rates Nominal rate Periodic rate Effective annual rate You want to invest $19,000 and...
a) What is the present value of $40 earned 2-years from now if compounding was semi-annual...
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%? b) 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”? c) What is the future value of an annuity due with a $15 cash flow, 4% annual interest with quarterly compounding three-years from now? d) If the...
pharmacy law QUESTION 1 10 points Save Answer Which term matches the definition: manipulation during compounding...
pharmacy law
QUESTION 1 10 points Save Answer Which term matches the definition: manipulation during compounding allowing sterility to remain intact? International Organization for Standardization O Aseptic Technique Disinfect O Beyond-use dating QUESTION 2 10 points Save Answer What is the definition of beyond use dating? It is the date in which you can start to use the compound It is the date assigned by the manufacturer It is the date after which you should not use the compound O...
QUESTION 1 10 points Save Answer Which term matches the definition: manipulation during compounding allowing sterility...
QUESTION 1 10 points Save Answer Which term matches the definition: manipulation during compounding allowing sterility to remain intact? International Organization for Standardization O Aseptic Technique Disinfect O Beyond-use dating QUESTION 2 10 points Save Answer What is the definition of beyond use dating? It is the date in which you can start to use the compound It is the date assigned by the manufacturer It is the date after which you should not use the compound O It is...
PLEASE ANSWER THIS QUESTION AND MOST ANSWER TO QUANTITATIVE PROBLEM THANKS YOU Different compounding periods, are...
PLEASE ANSWER THIS QUESTION AND
MOST ANSWER TO QUANTITATIVE PROBLEM
THANKS 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 -Select- v interest rate is quoted by borrowers and lenders, and it is...
PARTI: MULTIPLE CHOICE-Choose the letter of the most correct answer for each question. Record only one answer per question. 1. Which following statement is true, assuming an interest rate of greater than 0% a. The present value of a dollar to be received one year from today is ALWAYS worth more than one dollar. b. The present value of a dollar to be received one year from today is ALWAYS worth less than one dollar. c. The present value of...
Exercise 2. The 6-month, 12-month. I 8-month, and 24-month zero rates are 4%, 4.5%, 4.75% and 5%, with continuous compounding (a) What are the rates with semi-annual compounding? (c) Forward rates are rates of interest implied by current zero rates for periods of time in the future. Calculate the forward rate for year 2, i.e. the rate for the period of time between the end of 12-month and the end of 24-month. (d) Consider a 2-year bond providing semiannual coupon...
Previous Page Next Page Page 4 of 30 Question 4 (3.3 points) Which of the following statements is most correct? The first payment under a 3-year, annual payment, amortized loan for $1,000 will include a smaller percentage (or fraction) of interest if the interest rate is 5 percent than if it is 10 percent. If you are lending money, then, based on effective interest rates, you should prefer to lend at a 10 percent nominal, or quoted, rate but with...
3. Nonannual compounding period The number of compounding periods in one year is called compounding frequency. The compounding frequency affects both the present and future values of cash flows An investor can invest money with a particular bank and earn a stated interest rate of 13.20%; however, interest will be compounded quarterly. What are the nominal, periodic, and effective interest rates for this investment opportunity? Interest Rates Nominal rate Periodic rate Effective annual rate You want to invest $19,000 and...
pharmacy law
QUESTION 1 10 points Save Answer Which term matches the definition: manipulation during compounding allowing sterility to remain intact? International Organization for Standardization O Aseptic Technique Disinfect O Beyond-use dating QUESTION 2 10 points Save Answer What is the definition of beyond use dating? It is the date in which you can start to use the compound It is the date assigned by the manufacturer It is the date after which you should not use the compound O...
QUESTION 1 10 points Save Answer Which term matches the definition: manipulation during compounding allowing sterility to remain intact? International Organization for Standardization O Aseptic Technique Disinfect O Beyond-use dating QUESTION 2 10 points Save Answer What is the definition of beyond use dating? It is the date in which you can start to use the compound It is the date assigned by the manufacturer It is the date after which you should not use the compound O It is...
PLEASE ANSWER THIS QUESTION AND
MOST ANSWER TO QUANTITATIVE PROBLEM
THANKS 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 -Select- v interest rate is quoted by borrowers and lenders, and it is...
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