Find the present value of $500 due in the future under each of these conditions: a. 9% nominal rate, semiannual compounding, discounted back 10 years. Do not round Intermediate calculations. Round your answer to the nearest cent. $ b. 9% nominal rate, quarterly compounding, discounted back 10 years. Do not round Intermediate calculations. Round your answer to the nearest cent. $ c. 9% nominal rate, monthly compounding, discounted back 1 year. Do not round Intermediate calculations. Round your answer to the nearest cent. d. Why do the differences in the PVS occur? -Select-

Find the present value of $500 due in the future under each of these conditions: a. 9% nominal rate, semiannual compounding, discounted back 10 years. Do not round Intermediate calculations. Round your answer to the nearest cent. $ b. 9% nominal rate, quarterly compounding, discounted back 10 years. Do not round Intermediate calculations. Round your answer to the nearest cent. $ c. 9% nominal rate, monthly compounding, discounted back 1 year. Do not round Intermediate calculations. Round your answer to the nearest cent. d. Why do the differences in the PVS occur? -Select-

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%: $
Future Value for Various Compounding Periods Find the amount to which $350 will grow under each of the following conditions. Do not round intermediate calculations. Round your answers to the nearest cent. 6% compounded annually for 5 years. $ 6% compounded semiannually for 5 years. $ 6% compounded quarterly for 5 years. $ 6% compounded monthly for 5 years. $
Find the amount to which $300 will grow under each of these conditions: a. 6% compounded annually for 10 years. Do not round intermediate calculations. Round your answer to the nearest cent. $ b. 6% compounded semiannually for 10 years. Do not round intermediate calculations. Round your answer to the nearest cent. $ c. 6% compounded quarterly for 10 years. Do not round intermediate calculations. Round your answer to the nearest cent. $ d. 6% compounded monthly for 10 years. Do not round intermediate calculations. Round your answer to the nearest cent. $ e. 6% compounded daily for 10 years. Assume 365-days in a year. Do not round intermediate calculations. Round your answer to the nearest cent. $ f.Why does the observed pattern of FVs occur?
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
Raghubhai
What is the future value of $1,280 in 18 years assuming an interest rate of 8.8 percent compounded semiannually? (Round time value factors to 6 decimal places and final answer to the nearest dollar amount. Omit the "$" sign and commas in your response. For example, $123,456 should be entered as 123456.)
5.10 Find the present value of $300 due in the future under each of these conditions: 13% nominal rate, semiannual compounding, discounted back 10 years. Do not round intermediate calculations. Round your answer to the nearest cent.$   13% nominal rate, quarterly compounding, discounted back 10 years. Do not round intermediate calculations. Round your answer to the nearest cent.$   13% nominal rate, monthly compounding, discounted back 1 year. Do not round intermediate calculations. Round your answer to the nearest cent.$   Why do the differences in the PVs occur?-Select-The present values decline as periods per year increase.The present values decline as periods per year decrease.The present values increase as periods per year increase.The present values are not affected by changes in the number of periods per year.The present values are positively related to the number of discounting periods per year.Item 4
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?
Find the future values of these ordinary annuities. Compounding occurs once a year. Do not round intermediate calculations. Round your answers to the nearest cent. $300 per year for 8 years at 10%. $   $150 per year for 4 years at 5%. $   $200 per year for 4 years at 0%. $   Rework parts a, b, and c assuming they are annuities due. Future value of $300 per year for 8 years at 10%: $   Future value of $150 per year for 4 years at 5%: $   Future value of $200 per year for 4 years at 0%: $
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?
Find the present values of these ordinary annuities. Discounting occurs once a year. Do not round intermediate calculations. Round your answers to the nearest cent. $300 per year for 14 years at 8%. $ $150 per year for 7 years at 4%. $ $1,000 per year for 7 years at 0%. $ Rework previous parts assuming they are annuities due. Present value of $300 per year for 14 years at 8%: $ Present value of $150 per year for 7 years at 4%: $
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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