It is known that the accumulation function a(t) = At² +B. If RM100 is investedat time 0, the amount accumulates to RM172 at time 3. If RM100 is invested attime 5, find the accumulated value at time 10.(a)In return for payments of RM2000 at the end of 4th year and RM5000 at theend of 10th year, an investor agrees to pay RM3000 immediately and to makean additional payment at the end of 3rd year. Find the amount of the additionalpayment if the nominal rate of interest is 6% convertible quarterly.(b)

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Answered: It is known that the accumulation…

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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please do the following questions with full working
You are paid £1,000 annually for 7 years, with the first payment due in one year and the last payment due in 7 years. What is the present value of all these payments using an interest rate of 2%? £ 数字 Enter an answer correct to 2 decimal places.
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D. At a certain interest rate the present values of the following two payment patterns are equal: (i) P 200,000 at the end of 5 years plus P 500,000 at the end of 10 years; (ii) P 400,940 at the end of 5 years. At the same interest rate P100,000 invested now plus P 120,000 invested at the end of 5 years will accumulate to X at the end of 10 years. Calculate X.
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Please answer this question: What is the value at the end of Year 3 of the following cash flow stream if interest is 4% compounded semiannually? (Hint: you can use the EAR and treat the cash flows as an ordinary annuity or use the periodic rate and compound the cash flows individually.) What is the PV? What would be wrong with your answer to parts I(1) and I(2) if you used the nominal rate, 4%, rather than the EAR or the periodic rate, I sow /2=4%/2=2%, to solve the problems?

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