15. The force of interest, 8(t), is a function of time and at any time t (measure in years) is given by: (0.03 8(t) = at bt 0≤t≤ 10 10< t < 20 t > 20 where a and b are constants. The present value of RM100 due at time 20 is 50. (i) Calculate a. The present value of RM100 due at time 28 is 40. (ii) Calculate b. (iii) Calculate the equivalent annual effective rate of discount from time 0 to time 28.

15. The force of interest, 8(t), is a function of time and at any time t (measure in years) is given by: (0.03 8(t) = at bt 0≤t≤ 10 10< t < 20 t > 20 where a and b are constants. The present value of RM100 due at time 20 is 50. (i) Calculate a. The present value of RM100 due at time 28 is 40. (ii) Calculate b. (iii) Calculate the equivalent annual effective rate of discount from time 0 to time 28.

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

See similar textbooks

Similar questions

Determine the present value P you must invest to have the future value A at simple interest rate r after time t. A = $19,000, r = 11.5%, t = 4 years The present value that must be invested to get $19,000 after 4 years at an interest rate of 11.5% is $. (Round up to the nearest cent.)
If Po is the initial price of the security, P₁ is the price after you hold it for a year, and X represents a direct payment, an asset's rate of return is equal to: rate of return = (P₁ - Po) rate of return = (P₁ - Po) + X rate of return = (P₁-Po) / Po + XPo rate of return = (P₁ - Po)/Po + X
For a given APR and time period, present values will __________ (increase, decrease, or remain constant) and future values will ____________ (increase, decrease, or remain constant) as the number of compounding periods per year increases.
Calculate the 1. payback period, 2. the net present value to the nearest whole dollar (for example 4500), 3. the internal rate of return to the nearest whole percentage (for example 12), and 4. the modified internal rate of return (to the nearest whole percent, for example 12) Period OH 0 1 2 3 4 5 CF -100,000 25000 50000 50000 3000 1000 WACC 0.125 2 A N A/
Using the Rule of 72, approximately how many years are needed to double a $100 investment when interest rates are 5.25 percent per year? (Round your answer to 2 declmal places.) Period years < Prev o of 10 e here to search Eゴ ( F4 F5 F7 F10 F11 F12 76 #
Consider two assets with the following cash flow streams: Asset A generates $4 at t=1, $3 at t=2, and $10 at t=3. Asset B generates $2 at t=1, $X at t=2, and $10 at t=3. Suppose X=6 and the interest rate r is constant. For r=0.1, calculate the present value of the two assets. Determine the set of all interest rates {r} such that asset A is more valuable than asset Draw the present value of the assets as a function of the interest rate. Suppose r=0.2. Find the value X such that the present value of asset B is 12. Suppose the (one-period) interest rates are variable and given as follows: r01=0.1,r12=0.2, r23=0.3. Calculate the yield to maturity of asset A. (You can use Excel or ascientific calculator to find the solution numerically.)
the answer to this question is Q3.21= 11.7 persent but we just need to find how we get that answer for these questions, please help
Can I have an answer and solution for this one, please?
Y0: -7800 Y1: 1700 Y2: 2600 Y3: 3100 Y4: 4200 What is the payback perion in years?
10
7A) You are in the pizza business and want to buy a new pizza making machine. The machine costs $15051 today. At the end of each year you own the machine it will give you returns of $3420 after paying for maintenance and repairs. [Go on to 7B.]
Using a scientific calculator: Find the present value of the given future value: FV is &1,311 at 6 1/2 % simple interest from February 10 to October 15.

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS