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Honesty Company is investing in 5-year treasury bills with a face value of P500,000 and annual interest rate of 5%.
How much is the market value assuming a 360 days in a year?
Honesty Company is investing in 91-day treasury bills with a total fair market value of P2,500,000 for a purchase price of P2,475,000.
What is the annualized discount rate (round off your answer to two decimal places)?
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- Honesty Company is investing in 182-day treasury bills with a total fair market value of P2,500,000 for a purchase price of P2,475,000.What is the annualized investment rate (round off your answer to two decimal places)After a 1 year investment you receive 7.5% interest (nominal) from your bank. However, looking at how prices have changed, you soon realize that the real rate of interest was actually 1.6%. How much was inflation during that year? Enter your answer as a percentage, rounded to 2 decimals, and without the percentage sign ('%'). For example, if your answer is 0.02345, then enter 2.35Universal Savings & Loan has $1,000 to lend. Risk-free loans will be paid back in full next year with 17% interest. Risky loans have a 10% chance of defaulting (paying back nothing) and a 90% chance of paying back in full with 30% interest. How much profit can the lending institution expect to earn? Expected profit from the risk-free loan is $ a real number rounded to two decimal places) (Enter a numeric response using Expected profit from the risky loan is S Now suppose that the lending institution knows that the government will "bail out" Universal if there is a default (paying back the original $1,000). What type of loans will the lending institution choose to make? What is the expected cost to the government? The lending institution will make the loan.
- Which of the following statements is true? Group of answer choices If interest is 13% compounded annually, $1300 due one year from today is equivalent to $1,000 today. The higher the discount rate, the higher the present value. The process of accumulating interest on interest is referred to as discounting. If interest is 4% compounded annually, $1040 due one year from today is equivalent to $1000 today.A man deposits P100,000.00 in a bank at 7% compounded monthly for 6 years. If the inflation rate of 6.75% continues for this period, will this effectively protect the purchasing power of the original price? Answer using formula. Show complete solution.The bank is paying 11.29% compounded annually. The inflation is expected to be 12.22% per year. What is the market interest rate? Enter your answer as percentage, without the % sign. Provide 2 decimal places. For example, if 12.34%, enter: 12.34
- Suppose an investment will pay $7,000 in 44 years from now. If you can earn 6.15% interest compounded monthly by depositing your money in a bank, how much should you pay for the investment today?Round your answer to two decimal places. For example, if your answer is $345.667 round as 345.67 and if your answer is .05718 or 5.718% round as 5.72. Group of answer choicesSuppose you want to borrow $90,000 and you find a bank offering a 20-year loan with an APR of 5%. a. Find your regular payments if you pay n = 1, 12, 26, 52 times a year. b. Compute the total payout for each of the loans in part (a). c. Compare the total payouts computed in part (b). a. The payment for n = 1 would be $ The payment for n = 12 would be $ The payment for n = 26 would be $ The payment for n= 52 would be $ (Do not round until the final answer. Then round to the nearest cent as needed.)A one-year Treasury bill currently offers a 5% rate of return. A two-year Treasury note offers a 5.5% rate of return. Under the expectations theory, what rate of return do investors expect a one-year Treasury bill to pay next year?
- You are considering taking out a loan of $10,000.00 that will be paid back over 6 years with monthly payments of $158.74. If the interest rate is 4.5% compounded monthly, what would the unpaid balance be immediately after the sixth payment? What is the equity after the sixth payment? The unpaid balance would be $. (Round to 2 decimal places.) The equity would be $. (Round to 2 decimal places.) Tvm formulaSuppose that North bank currently charges a 3.5% fixed interest rate on a six -year auto loan and pays a 2.5% interest rate to customers who buy 6-month CDs. Suppose that at the end of the six-month period depositors roll over the funds in the CD for another six months. Then the interest rate spread is ? Suppose now that market interest rates increase by 0.4%. This means that North bank has to pay a (Higher, lower, the same) interest rate on CDs when they mature, while charging (Higher, lower, the same) interest rate on the six -year auto loans. What will happen to the interest rate spread? (choose 1) It decreases to 0.6% and the North bank's interest income rises. It becomes equal to 2.9% and the North bank's interest income rises. It increases to 2.5% and the North bank's interest income falls. It decreases to 0.6% and the North bank's interest income falls.1. (a) Suppose that the monthly compounded annual interest rate is 2.5%. What is the present value B of 1 pound received in 1 month from today (in other words, the discounting factor)? Give your answer to 6 decimal places. (b) Using the rate in part (a), suppose that you buy a television for 2000 pounds. The store gives you a deal for which you pay immediately 250 pounds and then make a payment A at the end of each month for 5 years until your debt is paid off. What is the payment A? (c) You are offered two different jobs. The salary paid at the end of each year (in thousands of pounds) is Job 1 2 4 A 12 14 16 18 20 В 16 16 15 15 15 Which job pays best if the annual nominal interest rate is r = 0.1? Which job pays best if instead the annual nominal interest rate is r = 0.2 ? (d) If a bank offers a continuously compounded interest at nominal rate 2%, how long does it take for the amount of money in the bank to triple?
