semiannually. After four years, it accumulates to 214,358.88. Investment Y for 100,000 is invested at a nominal interest rate of k convertible quarterly. After two years, it accumulates to 232,305.73. Investment Z for 100,000 accumulates at an annual effective rate of j for the first two years and an annual discount rate of k convertible monthly for the next two years. (a) Calculate the ratio between k and j. (b) If investment Z is invested at an annual effective rate of i, calculate i for the investment value at the end of four years. [3 marks) (c) Evaluate the ratio between the investment value of Z at the end of first year
semiannually. After four years, it accumulates to 214,358.88. Investment Y for 100,000 is invested at a nominal interest rate of k convertible quarterly. After two years, it accumulates to 232,305.73. Investment Z for 100,000 accumulates at an annual effective rate of j for the first two years and an annual discount rate of k convertible monthly for the next two years. (a) Calculate the ratio between k and j. (b) If investment Z is invested at an annual effective rate of i, calculate i for the investment value at the end of four years. [3 marks) (c) Evaluate the ratio between the investment value of Z at the end of first year
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
Related questions
Question
![Investment X for 100,000 is invested at a nominal interest rate of j convertible
semiannually. After four years, it accumulates to 214,358.88.
Investment Y for 100,000 is invested at a nominal interest rate of k convertible
quarterly. After two years, it accumulates to 232,305.73.
Investment Z for 100,000 accumulates at an annual effective rate of j for the first two
years and an annual discount rate of k convertible monthly for the next two years.
(a) Calculate the ratio between k and j.
16 marks
(b) If investment Z is invested at an annual effective rate of i, calculate i for the
investment value at the end of four years.
[3 marks]
(c) Evaluate the ratio between the investment value of Z at the end of first year
and between the investment value of Z at the end of fourth year.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F07a5608b-6d33-4c63-b694-46c9ae7b5e4d%2F5bbc4a67-a5ea-48df-a8f1-1a97451a8a2f%2Fxgzapzf_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Investment X for 100,000 is invested at a nominal interest rate of j convertible
semiannually. After four years, it accumulates to 214,358.88.
Investment Y for 100,000 is invested at a nominal interest rate of k convertible
quarterly. After two years, it accumulates to 232,305.73.
Investment Z for 100,000 accumulates at an annual effective rate of j for the first two
years and an annual discount rate of k convertible monthly for the next two years.
(a) Calculate the ratio between k and j.
16 marks
(b) If investment Z is invested at an annual effective rate of i, calculate i for the
investment value at the end of four years.
[3 marks]
(c) Evaluate the ratio between the investment value of Z at the end of first year
and between the investment value of Z at the end of fourth year.
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