Does the Compounding occur at a different rate than that at which payments are made?

Q: Define the term Deferred Loan Repayments?

A: Answer: A deferred loan payment is nothing but a loan agreement in which the borrower may start…

Q: How can we find the present worth of any uneven stream of payments?

A: The question is based on the concept of present value of uneven cash flow

Q: How can the Equivalence calculations be done at a varying interest rate?

A: Interest Rate - The amount of interest due each period expressed as a percentage of the amount lent,…

Q: The value of a series of payments is similar to the maturity value in a compounding transaction.…

A: Compound interest: It shall be measured on the principal sum and also on the accrued interest of…

Q: a)  Explain the difference between: Capital expenditure and revenue expenditure, giving an example…

A: Capital Expenditure: It is a expenditure made by company to acquire or renovate a property, plant or…

Q: What are the most frequent uses of contingent payments?

A: A contingent payment is a mechanism used in M&A whereby, in addition to an upfront payment,…

Q: Explain Payment Caps and Negative Amortization?

A: Payment Caps: A payment cap is a customer protection that bounds the amount that your monthly…

Q: Write an equation for determining the value of the series of end-of-period payments?

A: Formula:

Q: What is the meaning of Installment Sales?

A: Installment sale: It is one of a few potential income acknowledgments approaches under the Generally…

Q: What is issue of payments deficits

A: Introduction:- payment of deficit means:- Country imports more goods, services, and capital than…

Q: Give an example assuming that  the Compounding Period equals to Payment Period?

A: The representation on the basis of assumption:

Q: Q)5) One standard assumption for annuities and gradients is A) each payment occurs at the beginning…

A: Annuities are the series of payment made at equal interval on which compounded interest rate are…

Q: How does the present value of a future payment change as the time to receipt islengthened? As the…

A: Present Value of a future payment is calculated  based on the length of time and the interest rate…

Q: Summarize the varying effective interest rates per payment period under compounding frequencies?

A: The varying effective rate per payment period in case of compounding frequencies as under: When…

Q: Whenever payment and compounding periods differ from each other, it is recommended to compute the…

A: The effective annual interest rate is the real return for a bank account or other interest paid…

Q: What is the present worth of a uniform series payment?

A: The present worth is the value of an asset at present considering an assumed discount rate, which…

Q: What is the future worth of a uniform series payment?

A: The future worth is the value of an asset at a predefined future date which increases at a specific…

Q: 5) One standard assumption for annuities and gradients is A) each payment occurs at the beginning of…

A: An annuity can be defined as equal payment series over an equal period sequence. In other words,…

Q: How are refundable deposits and customer advances similar? How do they differ?

A: Refundable Deposits: Refundable deposits are that money in advance offered by the customer. It is a…

Q: Differences between Accrued Interest and Payments?

A: Answer: An accrued interest is nothing but interest on a loan or an interest on bond that has been…

Q: The process that determines the present value of a single payment or stream of payments to be…

A: Discounting : Discounting determines how much will be the worth of money if it is received today…

Q: What are annuities received? Also, how does the calculation of expected return and the calculation…

A: It is considered as a payment stream of an equal amount which would likely occur at a regular time…

Q: What is the Effective Rate per Payment Period?

A: Answer: The effective rate is nothing but the yearly rate under average compounding, will have…

Q: How can we compare interest rates that are compounded differently?

A: Solution Concept interest rates that are compounded differently               The number of…

Q: Do the Compounding Occurs More Frequently than payments are made?

A: Compound interest - In this method, the interest is calculated on the balance at the end of each…

Q: What is the difference between the regularand discounted payback periods?

A: The Regular Payback period is one of the capital budgeting techniques. It refers to the time period…

Q: Suppose that all possible types of perpetuities (differentiated in payment starting periods and…

A: A perpetual annuity is a policy that you pay indefinitely. In finance, eternity is a constant flow…

Q: Define the term Non-comparable Compounding and Payment periods?

A: The question is based on the concept of interest rate calculation, which depend on the compounding…

Q: why does an increase in the discount rate resuce the present value?

A: This relates to the concept of time value of money. We do discounting when present value needs to be…