Your financial institution account pays a 6% nominal price of interest. The interest is compounded quarterly. What is the periodic rate that interest and the effective rate of interest?


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Which the the following bank account has actually the shortest effective annual return?a. An account the pays 8% nominal interest w/ monthly compounding.b. An account the pays 8% nominal interest with yearly compounding.c. An account the pays 7% nominal interest with everyday (365-day) compounding.d. One account the pays 7% in the name interest through monthly compounding.
Charter financial institution pays a 4.50% nominal price on deposits, v monthly compounding. What effective yearly rate (EFF%) go the financial institution pay?
If a financial institution compounds savings account quarterly, the nominal rate will exceed the effective annual rate. True or False
The cash flows because that an annuity should all be equal, and also they must take place at regular intervals, together as as soon as a year or when a month. True or False
Last year Dania Corporation"s sales to be $525 million. If sales flourish at 7.5% per year, how huge (in millions) will they it is in 8 year later?
Suppose an Exxon coporation, group bond will pay $4,500 ten year from now. If the walk interest price on for sure 10-year binding is 4.25%, just how much is the bond precious today?
What"s the future worth of $1,200 ~ 5 years if the suitable interest rate is 6%, compounded monthly?
A two-year invest of $200 is made this particular day at an yearly interest price of 6%. Which of the complying with is true?a. The FV would be greater if the interest rate was higherb. The PV would be greater if the interest price was higherc. The FV would be higher if the interest price was lowerd. The FV go not adjust as the interest price changes
A diminish in the time period will rise the future value, various other things continuing to be equal. True or False
The future value is constantly greater 보다 the existing value, even if the interest price is negative. True or False
The existing value of a future sum decreases as either the discount rate or the variety of periods per your account increases, other things organized constant. True or False
All other things organized constant, the existing value of a given yearly annuity decreases as the variety of periods every year increases. True or False
You plan to analysis the value of a potential investment by calculating the sum of the existing value the its supposed cash flows. Which of the following would boost the calculated worth of the investment?b. The discount rate decreasesc. The riskiness of the investment"s cash flows increasesd. The complete amount the cash flows stays the same, but much more of the cash flows are obtained in the later years and also less space recieved in the previously years.
You desire to walk to Europe 5 years from now, and you deserve to save $3,100 every year, start one year native today. You arrangement to deposit the funds in a mutual fund that friend think will return 8.5% every year. Under these conditions, how much would certainly you have actually just after ~ you do the fifth deposit, 5 year from now?
You desire to quit her job and go back to institution for a law degree 4 year from now, and also you setup to conserve $3,500 every year, start immediately. You will make 4 shop in an account the pays 5.7% interest. Under this assumptions, how much will you have 4 years from today?
*** your aunt is around to retire, and she desires to market some of her stock and also buy an annuity the will administer her with revenue of $50,000 every year for 30 years, beginning a year native today. The going price on such annuities is 7.25%. How much would it price her come buy one annuity today?
Given a hopeful interest rate and also a confident cash flow, an annuity due constantly has a greater existing value than an plain annuity the the very same size and number of cash flows. True or False
You space considering two equally risky annuities, each of which pays $5,000 per year for 10 years. Invest ORD is an ordinary (or deferred) annuity, while invest DUE is an annuity due. I m sorry of the following statements is correct?
The existing value of early out exceeds the present value of ORD, and also the future value of DUE likewise exceeds the future worth of ORD.
What"s the current value the a 4-year ordinary annuity that $2,250 per year plus an additional $3,000 in ~ the end of Year 4 if the interest price is 5%?
Suppose you space buying your first condo because that $145,000, and you will make a $15,000 down payment. You have actually arranged come finance the remainder v a 30-year, monthly payment, amortized mortgage in ~ a 6.5% nominal interest rate, through the an initial payment due in one month. What will certainly your monthly payment be?
Simpson building had sales 7 years back of $2,150,000. This year their sales struggle $4,600,000. What has been Simpson"s average yearly rate of growth of sales?
You at this time have $2,500 invested at an annual rate of 8%. Just how long will it take for this investment to prosper to a value of $3,500?
You space considering an investment in a third World financial institution account that pays a nominal yearly rate the 18% compounded monthly. If friend invest $5,000 in ~ the beginning of every month, how countless months would it take for your account to grow to $250,000? round fractional month up
Other things staying equal, the price today and the growth rate are inversely related. True or False
*** girlfriend are offered a opportunity to buy one asset for $7,250 the is expected to develop cash flows of $750 at the end of Year 1, $1,000 at the finish of Year 2, $850 at the end of Year 3, and $6,250 at the end of Year 4. What price of return would you earn if girlfriend bought this asset?
You offered a car and accepted a note with the complying with cash circulation stream as your payment. What to be the effective price you received for the car assuming one interest price of 6.0%?
Suppose a bank offers to lend you $10,000 because that 1 year ~ above a loan contract that calls because that you to make interest payments of $250.00 in ~ the end of every quarter and then pay turn off the primary amount at the finish of the year. What is the effective annual rate ~ above the loan?
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