(a) What is the present value of a deposit that will earn 3% p.a. compounded quarterly for the next 5 years and yield a future value of $12,500? Give your answer rounded to the nearest cent. (b) What nominal (per annum) interest rate i, compounded quar- terly, would we need such that a deposit of $9,000 now would yield a future value of $12,500 in 5 years? Give your answer as a percentage rounded to two decimal places (e.g. 1.23%).

(a) What is the present value of a deposit that will earn 3% p.a. compounded quarterly for the next 5 years and yield a future value of $12,500? Give your answer rounded to the nearest cent. (b) What nominal (per annum) interest rate i, compounded quar- terly, would we need such that a deposit of $9,000 now would yield a future value of $12,500 in 5 years? Give your answer as a percentage rounded to two decimal places (e.g. 1.23%).

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 8MC: Define the stated (quoted) or nominal rate INOM as well as the periodic rate IPER. Will the future...

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