1. Let the annual interest rate be 6 %. Compute871Enter an answer correct to 6 decimal places.ä7Enter an answer correct to 6 decimal places.2. A fund is to be created which pays out a scholarship of £8,000 every year in perpetuity. The first scholarship will be paid out in9 years' time.Assuming an interest rate of 2%, how much should be paid into the fund?£Enter an answer correct to 2 decimal places.

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1. Let the annual interest rate be 6%. Compute 871 Enter an answer correct to 6 decimal places. ä-771 Enter an answer correct to 6 decimal places.

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 23E

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Concept explainers

Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.

Question

1. Let the annual interest rate be 6 %. Compute
871
Enter an answer correct to 6 decimal places.
ä7
Enter an answer correct to 6 decimal places.
2. A fund is to be created which pays out a scholarship of £8,000 every year in perpetuity. The first scholarship will be paid out in
9 years' time.
Assuming an interest rate of 2%, how much should be paid into the fund?
£
Enter an answer correct to 2 decimal places.

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