1. A series of equal monthly cash flows of $2,000 starts on 1 April 2016 and the last one is made on 1 February 2018. These cash flows are equivalent to a series of semi-annual cash flows which starts from 1 July 2019 to 1 January 2028. What is the amount of each semi-annual cash flow? Use a nominal interest rate of 12% with monthly compounding on all accounts. (8 pts)

1. A series of equal monthly cash flows of $2,000 starts on 1 April 2016 and the last one is made on 1 February 2018. These cash flows are equivalent to a series of semi-annual cash flows which starts from 1 July 2019 to 1 January 2028. What is the amount of each semi-annual cash flow? Use a nominal interest rate of 12% with monthly compounding on all accounts. (8 pts)

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Gary King will deposit $27500 into an account today that earns 13% per year compounded annually. Using the following factors, what is the amount that will be in the account at the end of the 5 years? Type of Cash Flow Periods Interest Rate Factor PV of $1 5 13% 0.5428 FV of $1 5 13% 1.8424 PV ordinary annuity 5 13% 3.5172 FV ordinary annuity 5 13% 6.4803 PV annuity due 5 13% 3.9744 $25333 $50666 $14927 $29854
3. Financing is offered with the following terms: $24,000 cash now repaid with 24 equal monthly payments of $1,269. What interest rate is being charged? Show your answer both as interest rate per month and as an effective annual interest rate.
If you make quarterly deposits of $1000 for 15 years into an account that compoundsinterest at 1.5% per month, what is the value F at end of the 15-years period. (Ans. $297,381.08)(Draw the Cashflow)
A loan of P50,000 is to be amortized by paying quarterly in 1 year. If money is worth 10% compounded quarterly, how much is the monthly installment? a. P13,648.90 b. P11,589.57 c. P12.765.50 d. P13,290.89
What cash payment is equivalent to making payments of $1471.00 at the end of every year for 8 years if interest is 12% per annum compounded quarterly? The cash payment is S (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
Answer the following Compound Interest problem using the provided formula ONLY. Show your complete solution. 7. Compound Interest A. If the sum of P 12,000 (pesos) is deposited in an account earning interest rate of 9% compounded quarterly, what will it become after 1 year? B. In the previous problem, what is the effective rate? C. What is then the equivalent nominal interest rate if compounded monthly?
Using the future values tables, solve the following: What is the future value on December 31, Year 11, of 20 cash flows of $15,000 with the first cash payment made on December 31, Year 1, and the annual interest rate of 10% being compounded semiannually?
If the interest rate is 10% and compounding is semiannual, what series of equal annual transactions is equivalent to the following series of semiannual transactions? The first of the equal annual transactions is to occur at the end of the second year and the last at the end of the fourth year. Time (yr) 3 5 5% 1 SO Period 3 4 5 7 8 10 11 Cash Flow 600 500 400 300 200 100 300 500 700 900 1100 12
A bank offers a fixed term deposit investment account with an interest rate of 6.5% per annum compounding quarterly how do I work out what the equivalent effective interest rate is
A company is due to receive €2,500,000 two-months from today and wishes to save the funds for three months. Money market interest rate spreads for short-term euro transactions are presented in the table below. Money Market Euro Interest Rate Spreads (%) 1 month 2 months 3 months 4 months 5 months 6 months 0.20 - 0.25 0.28– 0.33 0.35 – 0.40 0.45 – 0.56 0.60 – 0.67 0.75 – 0.83 A bank is willing to offer the company a forward rate agreement (FRA), incorporating a forward rate fixed at the level calculated in part a). When the money is received, the €LIBOR rate is 0.35%. Calculate and explain the terms on which the FRA is settled.
A bank is currently offering a savings account paying an interest rate of 6.0 percent compounded quarterly. It would like to offer another account ,with the same effective annual rate ,but compounded monthly. What is the equivalent rate of compound monthly.?
Calculate the present value as at 1 January 2019 of a series of payments of £100 payable on the first day of each month during 2020, 2021 and 2022, assuming an effective rate of interest of 8% per annum. Calculate this in form of Annuities like in Actuarial Science.

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