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Question 3: B-    An Entrepreneur assumes he will need $50,000 in 8 years to develop his business. He decides that he will put aside the money now so that after 8 years the $50,000 will be available. The bank offers him 4% interest compounded semiannually. What is the present value of the $50,000?                                                                                            C-    A person deposited $40,000 at a bank at an interest rate of 16% compounded quarterly. Find the effective rate (APY). Write your answer in percentage rounded to the nearest hundredth.

Question 3: B-    An Entrepreneur assumes he will need $50,000 in 8 years to develop his business. He decides that he will put aside the money now so that after 8 years the $50,000 will be available. The bank offers him 4% interest compounded semiannually. What is the present value of the $50,000?                                                                                            C-    A person deposited $40,000 at a bank at an interest rate of 16% compounded quarterly. Find the effective rate (APY). Write your answer in percentage rounded to the nearest hundredth.

Essentials Of Investments
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
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Question 3:


B-    An Entrepreneur assumes he will need $50,000 in 8 years to develop his business. He decides that he will put aside the money now so that after 8 years the $50,000 will be available. The bank offers him 4% interest compounded semiannually. What is the present value of the $50,000?                                                                                            

C-    A person deposited $40,000 at a bank at an interest rate of 16% compounded quarterly. Find the effective rate (APY). Write your answer in percentage rounded to the nearest hundredth.                                                                                                                   

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