What is the annual dollar advantage of Alt. II over Alt. I at an interest rate of 15%?

Q: Estimate the annual percent rate for the add on loan Using the given number of payments and annual…

A: As per the information provided:  N = 48 R = 8% To determine: We have to estimate the annual…

Q: What is the nominal annual interest rate if the effective annual rate is 5.5% and compounding is…

A: In this question the compounding is continuous so the nominal rate needs to be converted to…

Q: (b)  What is the nominal annual interest rate compounded continu- ously for an annual percentage…

A: In this question we need to compute the nominal annual interest rate compounded continuously for an…

Q: If there is a deflation rate of 2% and your account is earning a nominal interest rate of 1.75%,…

A: Deflation rate (d) = 2% Nominal interest rate (r) = 1.75%

Q: What interest rate, compounded monthly, is equivalent to a 10.04% effective interest rate?

A: Effective interest rate : In simple words, the actual rate of return that an individual receives…

Q: What interest rate compounded monthly is equivalent to a 10% effective rate?

A: Given,  Effective rate=10% Compounding frequency=12

Q: How long will an amount of money double at a simple interest rate for 10% per annum?

A: Solution: For money to double we need 100% return on principal Annual return using simple interest =…

Q: What is the interest rate “r” if PV=$1250 and the FV=$2150 in year t=10?

A: Future value = Present value *(1+r)^n

Q: What is the equivalent effective rate of minal rate is 14.5%?

A: Nominal interest rate is interest rate without the impact of compounding but effective interest rate…

Q: What will be the Net interest income variation for the cumulative GAP, if interest rates have a 1%…

A: The potential loss from unexpected changes in interest rates can significantly alter a bank’s…

Q: If the interest rate per day is 0.014%, then what is the annual rate?

A: Interest rate:An interest rate is a percentage on the principal amount at which a lender gives money…

Q: Q1. (a) What effect does compounding interest more frequently than annually have on: (i) future…

A: Compound Interest is the interest on a deposit or loan calculated on the basis of initial interest…

Q: The present value interest factor for a dollar on hand today is 0. T/

A: Present value interest factor = (1 + interest rate)No. of years

Q: The expected inflation rate is 2.1%. What nominal interest rate is necessary to earn a real return…

A: The real rate of return is the net percentage of interest earned after adjusting the inflation rate.…

Q: What is the present value of payments that are: year 0: 5000, year1: 10000, year2: 12500, year3:…

A: Present value shows the worth of future’s money at present time. It is also known as discounted…

Q: What is the interest rate “r” if PV=$100 and the FV=$350 in year t=12?

A: Present Value is the current value of a cash flow that can be occurred in future. Future value is…

Q: The effective rate of interest compounded quarterly is given by i(m)/m. What is m? Write your answer…

A: Quarterly compounded effective rate of interest implies that rate of interest is compounded every…

Q: 2. Suppose the Investment Yield on a 182-day T bill is 4%. What is its discount-basis yield?

A: Given, n= 182 days T bill = 4%  Investment Yield = ?  Discount-basis yield= ?

Q: Compute the present value if future value (FV) = $4892, interest rate (r) = 14.0%, and number of…

A: The PV of an investment refers to the worth of the cash flows of the investment discounted to the…

Q: How long will an amount of money double at a simple interest rate of 2% per annum?

A: Let, it takes n years to double the money. Then, 2 = 1 + 1 x n x 2% 1 = n x 2% n = 1/2% n = 50 years

Q: 2. If the current inflation rate is 3.6% and you have an investment opportunity that pays 10.9%,…

A: Inflation rate = 0.036 Nominal interest rate = 0.109 Real rate of interest = ?   Real rate of…

Q: What would you expect the nominal rate of interest to be if the real rate is 4.2% and the expected…

A: Solution:- Nominal rate of interest means rate of interest after the effect of inflation in real…

Q: If the compounding frequency is monthly and the discount factor=0.62026, what is the value of the…

A: Let i(12) denote monthly interest rate Discount Factor = 1/(1+i(12)) 0.62026 = 1/(1+i(12)) i(12) =…

Q: If your real rate of return is 2% and the inflation rate is 3%, what is the nominal rate of return?

A: Real rate of return = 2% Inflation rate = 3%

Q: Table 1: NPV and EVA investment decision analysis of agricultural water project (unit: 10 thousand…

A: Rate of Return: Return on investment (RoI) is the difference between the original cost of an…

Q: What nominal interest rate compounded quarterly is equivalent to j∞=j∞= 7%?

A: Nominal Interest Rate: This percentage increase in the amount of money you pay the lender in…

Q: What happens if we calculate the NPW of the loan transaction at its rate ofreturn (10% )?

A: Net present worth is the worth of an investment or a loan in today’s terms. It helps to make…