2 Let S be the accumulated value of 2500invested for two years at a nominal annualrate of discount d convertible semiannually,which is equivalent to an annual effectiveinterest rate of i.Let T be the accumulated value of 2500invested for one year at a nominal annual rateof discount d convertible quarterly.S/T = (41/40)4Calculate i.Select one:А.10.00%В.10.75%С.11.00%D.10.25%Е.10.50%

An accumulated sum at a future point is the summation of interest and principal. Interest is charged…

Answered: Calculate i.

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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Similar questions

Assume that l2t =0.25% and that l1t = O. If the one-year interest rate is 5% and the two-year interest rate is 5.75%, then i1 is equal to: O A.6% O B. 5.75% O C. 5.50% O D. 5.25%
a and b plz
13. A fixed income instrument with a stated annual interest rate of 18% and offers monthly compounding has an effective annual rate (EAR) closest to: A. 18.00%. В. 19.56%. С. 20.12%.
9. Camilla wishes to compute the effective annual rate of a financial instrument with stated annual rate of 22% and compounded on a quarterly basis? Which of the following is most likely to be closest to the effective annual rate? А. 23%. В. 24%. С. 25%.
A one-year discount factor Z(0, 1) is at 0.999 and a two-year discount factor Z(0, 2) is at 0.99. The quarterly - compounded forward rate f 4 (0, 1, 2) equals to A. 0.905% B. 0.907% C. 1.810% D . 1.812% E. None of A to D is correct
1. It is the amount paid or earned for the use of money. A. Principal 2. What is the equivalent interest period of compounding quarterly? A. 1 month 3. How many periods of conversion does compounding semi-annually will have in 3 years? А. 2 B. Present Value C. Interest D. Future Value B. 3 months C. 4 months D. 6 months В. 4 С.6 D. 8
5. The compound interest on Rs. 30,000 at 7% per annum is Rs. 4347. The period (in years) is: A. Ο 2 В. О 1 С. О З D. O 4 IN 2.
Simple Interest: I = Prt Simple Interest Future Value: FV = : P(1+rt) Compound Interest: FV = P(1+)nt Annual Yield: APY (1+ 5)" – 1 (1+)nt – 1 Ordinary Annuity (payments due at the end of each period): FV, = pymt · Annuity Due (payments due in the beginning of each period): FV4= pymt · (1+5)nt – 1 (1+5) r. n Present Value of Annuity: P(1+)nt = FV (annuity) (1+ 5)nt – 1 Simple Interest Amortized Loan: pymt- P(1+)n (1+ 5)nt – 1 Simple Interest Amortized Loan Unpaid Balance (after t years): P(1+5)nt – pymt- (1+ 5)nt – 1 Payout Annuity: P(1+)nt = pymt · n (1+c 1- 1+r Payout Annuity with COLA: P pymt · r - c
Consider the following timeline: Date Cash flow $100 OA. $627 OB. $482 OC. $600 OD. $964 2 $200 3 $300 If the current market rate of interest is 10%, then the present value (PV) of this timeline as of year 0 is closest to ICCESS
If i= 14.8% per year, compounded monthly, What is the effective interest rate per semiannual? (ABET, S01) Select one: Oa. 15.85% Ob. 7.63% O c. 7.4% O d. 1.23% Oe. 7.91%
Q2: a) What rate, compounded semi-annually, is equivalent to 10% compounded quarterly? m NOM EFF m EFF EQUIV A. 10.13% B. 10.38% C. 10.25% D. 10.85%
End of Year Annuity X Annuity Y ETT 1-10 1 K 11-20 21-30 1 K Annuities X and Y have equal present values at an annual effective interest rate i such that v10 = 1/2. Determine K.

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