Q Search this Ey- Time value of money c. Find the PV of $1,000 due in 6 years if the discount rate is 12%. Round your answer to the nearest cent. 24 d. A security has a cost of $1,000 and will return $2,000 after 6 years. What rate of return does the security provide? Round your answer to two decimal places. % e. Suppose California's population is 34.3 million people, and its population is expected to grow by 3% annually. How long will it take for the population to double? Round your answer to the nearest whole number. years

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
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Ey- Time value of money
c. Find the PV of $1,000 due in 6 years if the discount rate is 12%. Round your answer to the nearest cent.
24
d. A security has a cost of $1,000 and will return $2,000 after 6 years. What rate of return does the security provide? Round your answer to two decimal places.
%
e. Suppose California's population is 34.3 million people, and its population is expected to grow by 3% annually. How long will it take for the population to double? Round your answer
to the nearest whole number.
years
f. Find the PV of an ordinary annuity that pays $1,000 each of the next 6 years if the interest rate is 18%. Then find the FV of that same annuity. Round your answers to the nearest
cent.
PV of ordinary annuity: $
FV of ordinary annuity: $
g. How will the PV and FV of the annuity in part f change if it is an annuity due rather than an ordinary annuity? Round your answers to the nearest cent.
PV of annuity due: $
FV of annuity due: $
h. What will the FV and the PV for parts a and c be if the interest rate is 12% with semiannual compounding rather than 12% with annual compounding? Round your answers to the
nearest cent.
FV with semiannual compounding: $
PV with semiannual compounding: $
I. Find the annual payments for an ordinary annuity and an annuity due for 12 years with a PV of $1,000 and an interest rate of 10%. Round your answers to the nearest cent.
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Transcribed Image Text:Q Search this Ey- Time value of money c. Find the PV of $1,000 due in 6 years if the discount rate is 12%. Round your answer to the nearest cent. 24 d. A security has a cost of $1,000 and will return $2,000 after 6 years. What rate of return does the security provide? Round your answer to two decimal places. % e. Suppose California's population is 34.3 million people, and its population is expected to grow by 3% annually. How long will it take for the population to double? Round your answer to the nearest whole number. years f. Find the PV of an ordinary annuity that pays $1,000 each of the next 6 years if the interest rate is 18%. Then find the FV of that same annuity. Round your answers to the nearest cent. PV of ordinary annuity: $ FV of ordinary annuity: $ g. How will the PV and FV of the annuity in part f change if it is an annuity due rather than an ordinary annuity? Round your answers to the nearest cent. PV of annuity due: $ FV of annuity due: $ h. What will the FV and the PV for parts a and c be if the interest rate is 12% with semiannual compounding rather than 12% with annual compounding? Round your answers to the nearest cent. FV with semiannual compounding: $ PV with semiannual compounding: $ I. Find the annual payments for an ordinary annuity and an annuity due for 12 years with a PV of $1,000 and an interest rate of 10%. Round your answers to the nearest cent. Back Autosaved at 11:36 AM Next МacВook Air 888 F2 F3 F4 F7 F8 F10 F11 23 $ & * 2 3 4 5 8 W E R T Y %3D S G H J K C V N amand command option .. .- V
ne value of money
h. What will the FV and the PV for parts a and c be if the interest rate is 12% with semiannual compounding rather than 12% with annual compounding? Round your answers
nearest cent.
FV with semiannual compounding: $
PV with semiannual compounding: $
I. Find the annual payments for an ordinary annuity and an annuity due for 12 years with a PV of $1,000 and an interest rate of 10%. Round your answers to the nearest cent
Annual payment for ordinary annuity: $
Annual payment for annuity due:
%24
j. Find the PV and the FV of an investment that makes the following end-of-year payments. The interest rate is 10%.
Year
Payment
$200
2
$300
3
$500
Round your answers to the nearest cent.
PV of investment: $
FV of investment: $
k. Five banks offer nominal rates of 9% on deposits, but A pays interest annually, B pays semiannually, C pays quarterly, D pays monthly, and E pays daily. Assume 365 days in
1. What effective annual rate does each bank pay? If you deposit $6,000 in each bank today, how much will you have in each bank at the end of 1 year? 2 years? Round your
answers to two decimal places.
B
D
EAR
9.00 %
9.20 %
9.31 %
9.38 %
9.42 %
FV after 1 year
%24
6,540.00
6,552.15
6,558.50
%24
6,562.84
%$4
6,564.97
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Transcribed Image Text:ne value of money h. What will the FV and the PV for parts a and c be if the interest rate is 12% with semiannual compounding rather than 12% with annual compounding? Round your answers nearest cent. FV with semiannual compounding: $ PV with semiannual compounding: $ I. Find the annual payments for an ordinary annuity and an annuity due for 12 years with a PV of $1,000 and an interest rate of 10%. Round your answers to the nearest cent Annual payment for ordinary annuity: $ Annual payment for annuity due: %24 j. Find the PV and the FV of an investment that makes the following end-of-year payments. The interest rate is 10%. Year Payment $200 2 $300 3 $500 Round your answers to the nearest cent. PV of investment: $ FV of investment: $ k. Five banks offer nominal rates of 9% on deposits, but A pays interest annually, B pays semiannually, C pays quarterly, D pays monthly, and E pays daily. Assume 365 days in 1. What effective annual rate does each bank pay? If you deposit $6,000 in each bank today, how much will you have in each bank at the end of 1 year? 2 years? Round your answers to two decimal places. B D EAR 9.00 % 9.20 % 9.31 % 9.38 % 9.42 % FV after 1 year %24 6,540.00 6,552.15 6,558.50 %24 6,562.84 %$4 6,564.97 Back Autosaved at 11:36 AM MacBook Air 80 888 DII DD F2 F3 F4 F5 F6 F7 FB F9 F10 @ 23 $ & * 3 4 5 6 7 8 9 W E R Y U F G H J K C V 3D Command
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