Check My WorkeBookProblem Walk-ThroughFind the present value of $400 due in the future under each of these conditions:a. 15% nominal rate, semiannual compounding, discounted back 7 years. Do not round intermediate calculations. Round your answer to the nearest cent.$b. 15% nominal rate, quarterly compounding, discounted back 7 years. Do not round intermediate calculations. Round your answer to the nearest cent.$c. 15% nominal rate, monthly compounding, discounted back 1 year. Do not round intermediate calculations. Round your answer to the nearest cent.$

Find the present value of $400 due in the future under each of these conditions: a. 15% nominal rate, semiannual compounding, discounted back 7 years. Do not round intermediate calculations. Round your answe $ b. 15% nominal rate, quarterly compounding, discounted back 7 years. Do not round intermediate calculations. Round your answer t c. 15% nominal rate, monthly compounding, discounted back 1 year. Do not round intermediate calculations. Round your answer to 24

Find the present value of $400 due in the future under each of these conditions: a. 15% nominal rate, semiannual compounding, discounted back 7 years. Do not round intermediate calculations. Round your answe $ b. 15% nominal rate, quarterly compounding, discounted back 7 years. Do not round intermediate calculations. Round your answer t c. 15% nominal rate, monthly compounding, discounted back 1 year. Do not round intermediate calculations. Round your answer to 24

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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Find the following values. Compounding/discounting occurs annually. Do not round intermediate calculations. Round your answers to the nearest cent. a. An initial $800 compounded for 10 years at 3%. $ b. An initial $800 compounded for 10 years at 6%. $ c. The present value of $800 due in 10 years at 3%. $ d. The present value of $2,855 due in 10 years at 6% and 3%. Present value at 6%: $ Present value at 3%: $
Find the following values using the equations and then a financial calculator. Compounding/discounting occurs annually. Do not round intermediate calculations. Round your answers to the nearest cent. a. An initial $800 compounded for 1 year at 9%. $ b. An initial $800 compounded for 2 years at 9%. $ c. The present value of $800 due in 1 year at a discount rate of 9%. $ d. The present value of $800 due in 2 years at a discount rate of 9%. $
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Find the future values of the following ordinary annuities: a. FV of $600 paid each 6 months for 5 years at a nominal rate of 6% compounded semiannually. Do not round intermediate calculations. Round your answer to the nearest cent. $ b. FV of $300 paid each 3 months for 5 years at a nominal rate of 6% compounded quarterly. Do not round intermediate calculations. Round your answer to the nearest cent. $ c. These annuities receive the same amount of cash during the 5-year period and earn interest at the same nominal rate, yet the annuity in part b ends up larger than the one in part a. Why does this occur? 819000.0 The annuity in part (b) is compounded more frequently, therefore, more interest is earned on previously-earned interest. V
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Future Value of an Annuity for Various Compounding Periods Find the future values of the following ordinary annuities. FV of $600 each 6 months for 4 years at a nominal rate of 12%, compounded semiannually. Do not round intermediate calculations. Round your answer to the nearest cent. $   FV of $300 each 3 months for 4 years at a nominal rate of 12%, compounded quarterly. Do not round intermediate calculations. Round your answer to the nearest cent. $   The annuities described in parts a and b have the same amount of money paid into them during the 4-year period, and both earn interest at the same nominal rate, yet the annuity in part b earns more than the one in part a over the 4 years. Why does this occur?
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Find the future values of the following ordinary annuities: FV of $300 paid each 6 months for 5 years at a nominal rate of 12% compounded semiannually. Do not round intermediate calculations. Round your answer to the nearest cent. $   FV of $150 paid each 3 months for 5 years at a nominal rate of 12% compounded quarterly. Do not round intermediate calculations. Round your answer to the nearest cent. $   These annuities receive the same amount of cash during the 5-year period and earn interest at the same nominal rate, yet the annuity in part b ends up larger than the one in part a. Why does this occur?
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Find the following values. Compounding/discounting occurs annually. Do not round intermediate calculations. Round your answers to the nearest cent. a. An initial $800 compounded for 10 years at 6%. b. An initial $800 compounded for 10 years at 12%. c. The present value of $800 due in 10 years at 6%. d. The present value of $1,485 due in 10 years at 12% and 6%. Present value at 12%: $ Present value at 6%:
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