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Calculate d4). C

Calculate d4). C

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
ChapterM: Time Value Of Money Module
Section: Chapter Questions
Problem 11E
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Incorrect Incorrect Question 6 Mrs. Williams finds that she has two options for investing $31,000.03 for fifteen years. The first option is to deposit the $31,000.03 into a fund earning a nominal rate of discount d(4) payable quarterly. The second option is to purchase an annuity-immediate with 15 level annual payments, the annuity payments computed using an annual effective rate of 6%, and then when she gets an annuity payment, to immediately invest it into a fund earning an annual effective rate of 4%. Mrs. Williams calculates that the second option produces an accumulated value that is $1,500 more than the accumulated value yielded by the first option. Calculate d(4). (Round your answer to two decimal places.) (4) = % 4.640 Question 7 Sigmund and Karl each borrowed an identical amount from Ludwig at a nominal rate of discount of 5.2% convertible quarterly. Sigmund repays his loan by making payments of $3,000 at the end of each year for six years. Karl makes payments of $4,100 at four equally spaced times T, 2T, 3T, and 4T. Find T. (Hint: You will need to find the interest rate I for a period of length T. Round your answer to three decimal places.) T = (year) .034
Transcribed Image Text:Incorrect Incorrect Question 6 Mrs. Williams finds that she has two options for investing $31,000.03 for fifteen years. The first option is to deposit the $31,000.03 into a fund earning a nominal rate of discount d(4) payable quarterly. The second option is to purchase an annuity-immediate with 15 level annual payments, the annuity payments computed using an annual effective rate of 6%, and then when she gets an annuity payment, to immediately invest it into a fund earning an annual effective rate of 4%. Mrs. Williams calculates that the second option produces an accumulated value that is $1,500 more than the accumulated value yielded by the first option. Calculate d(4). (Round your answer to two decimal places.) (4) = % 4.640 Question 7 Sigmund and Karl each borrowed an identical amount from Ludwig at a nominal rate of discount of 5.2% convertible quarterly. Sigmund repays his loan by making payments of $3,000 at the end of each year for six years. Karl makes payments of $4,100 at four equally spaced times T, 2T, 3T, and 4T. Find T. (Hint: You will need to find the interest rate I for a period of length T. Round your answer to three decimal places.) T = (year) .034
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