If the interest rate is zero, the future value interest factor equals

Q: relationship between Future Value Factor and Future Value of an Annuity Factor

A: Future value factor is the equivalent value at the some future date of a cash flow at time 0. For…

Q: The difference between the nominal interest rate and the effectiveinterest rate.

A: The nominal interest rate is the interest rate paid annually without compounding period.  The…

Q: o calculate the Internal Rate of Return, you need to know what interest rate to start with. True or…

A: Internal rate of return (IRR) is the rate at which NPV is zero

Q: Formula for interest rate parity?

A: Interest Rate Parity: It is the technique used to govern the relation between currency exchange rate…

Q: Explain The Need for an External Interest Rate?

A: There is a strong need for the external interest rate because it helps in making financial…

Q: What is the difference between the stated interest rate and the market interest rate?

A: Bonds PayableBonds payable are referred to long-term debts of the business, issued to various…

Q: Multiple Choice Time and future values are inversely related, all else held constant. Interest rates…

A: Money has time value, value of money changes with time due to the interest rate and it is not same…

Q: Explain the addition to the interest rate, HELOC borrowers consider the issues?

A: Home buyers mostly take loans to buy the home and they will pay the debt in equated installments.…

Q: Which of these will increase the present value of an amount to be received sometime in the future?…

A: The present value represents the current worth of the future expected sum of the amount. It is…

Q: Goodyear, a U.S. firm, sells tires to Airbus UK, and will receive payment of £1,000,000 in one year.…

A: With globalisation and increasing demand of services and products, firms operates businesses…

Q: __________ is the interest rate that makes NPV equal to zero when it is used as the discount rate

A: Net present value is the sum of values discounted of cash flows less the amount of initial cost.…

Q: What is net interest margin(NİM)?

A: There are various profitability ratios

Q: 1. How are interest rates determined? Discuss and explain the interest rate equation and its…

A: Interest rate can be defined as the price that lenders charge for lending their money to borrowers.…

Q: What is the internal rate of return? How is it used? How does it relate to the concept of compound…

A: The internal rate of return (IRR) is a capital budgeting metric used to gauge the benefit of…

Q: Is a cap rate the same as an IRR? Which is generally greater? Why?

A: The capitalization rate or cap rate cant be considered as similar to the IRR or the internal rate of…

Q: How is duration related to the interest elasticity of a fixed income security? What is the…

A: Duration:A bond's duration is used to evaluate its risk and return characteristics as well as its…

Q: Will the actual realized yields be equal to the expected yields if interest rates change? If not,…

A: Yield to maturity is defined as the rate of return that needs to be earned by the holders of the…

Q: How does the interest rate adjust?

A: Interest rate levels are based on two factors- supply and demand of credit: an increase in the…

Q: Explain Nominal and real interest rates.

A: Inflation: Inflation is the speed of increase in costs throughout a given time span. Inflation is…

Q: How are Effective Interest Rates calculated?

A: Effective interest rate is the interest earned on the investment or saving account.

Q: Give an example for Ordinary Present Value of Annuity from your own understanding.

A: Let, Annual Amount to be paid for 10 years are $10,000. Interest rate charged @ 10% Here Annual…

Q: 5. HOW based crm er interest rates and its yield curve?

A: Yield curve:- A yield curve is a graph that compares the yields (interest rates) of bonds with…

Q: Why is it important to have a financial benchmark for short-term interest rates?

A: The objective of the question is to understand the importance of having a financial benchmark for…

Q: Define the term break-even interest rate?

A: The question is to define break even interest rate. The concept of  Break even interest rate is…

Q: What is the Cumulative interest payment?

A: Cumulative interest payment is the sum of all previous interest payments that are made for an…

Q: What is expectations theory of the term structure of interest rates? Group of answer choices a.…

A: There are three theories based on term structure of interest rate namely Expectation theory, Market…