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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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Question

With an annual inflation rate of 1.38%, how much did an item that now costs $200 cost 3 years prior?

An item that currently costs

$200

would have cost

$enter your response here ... 3 years ago.

(Round to the nearest cent as needed.)

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Similar questions

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I calculated the PV value of a $100 payment stream at 1% for 6 years payable at the beginning of the year to be $585.34. Likewise, if I have a balance today of $584.34 in 6 years this balance would be paid off if I deduct $100 at the beginning of each year at 1% interest. (See image capture 1) However I run into issues whe I use two interest rates. Time Payment Rate PV 0 $100 1% 100/(1.01)^0=100 1 $100 1% 100/(1.01)^1=99.01 2 $100 1% 100/(1.01)^2=98.03 3 $100 2% 100/((1.01)^2*(1.02))=96.11 4 $100 2% 100/((1.01)^2*(1.02)^2)=94.22 5 $100 2% 100/((1.01)^2*(1.02)^3)=92.38 The Total PV for this stream is $579.75. So why doesn't the following equation yield zero: Time Payment Rate Balance…
You wish to have $100,000 in 15 years. How much should you set aside today if the discount rate is 14%? N = i = % years To answer this question, I should calculate: OFV OPMT OPV I should set aside today: $ Calculation details (recommended): (Include two decimal places)
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%: $
Required: Solve for the unknown number of years in each of the following: (Round your answers to 2 decimal places.) Present Years Discount Rate Future Value Value $ 5,600 9 % $ 12,840 8,100 10 % 43,410 184,000 17 % 3,645,180 215,000 15 % 1,734,390
1. If the stated annual rate of interest compounded annually is 8% then what is the equivalent annual rate compounded daily? Pls show formula used. Final dollar answers should be rounded to two decimal places. Interest rate answers should be rounded to 6 decimal places if expressed as a decimal or 4 decimal places if expressed as a percent. Use timeline if necessary. No excel .Thanks!
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(Present-value comparison) You are offered $1,300 today, $6,000 in 10 years, or $26.000 in 23 years. Assuming that you can earn 9 percent on your money, which offer should you choose? a. What is the present value of $26,000 in 23 years discounted at 9 percent interest rate? (Round to the nearest cent) b. What is the present value of $6,000 in 10 years discounted at 9 percent interest rate? $(Round to the nearest cent) c. Which offer should you choose? (Select the best choice below) OA. Choose $6,000 in 10 years because its present value is the highest OB. Choose $1,300 today because its present value is the highest OC. Choose $26.000 in 23 years because its present value is the highest Com

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