What is the relation between the present value of an investment and time and interest rate?

Q: Distinguish the nominal rate of return from the real rate of return.

A:

Q: What is market interest rate?

A: The interest rate in which borrowers and lenders borrow and lend money to each other is called…

Q: What are investment returns?

A: Investment returns are a performance measure used to evaluate a speculation’s adequacy or to think…

Q: What is interest rate?

A: Answer: At a particular situation, an interest rate determines how much money a borrower promises to…

Q: Which of the following is not needed to compute the present value of an investment?a. The length of…

A: Present value:   Present value refers to the present worth of the money that is received in future…

Q: Briefly explain the following a. Relation between present value and interest rate

A: Present value = Applying time value to the future cash flows using interest rates Present Value =…

Q: What effect do interest rates have on the calculation of future and present value? How does the…

A: The time value of money is a concept that is based on the idea that a given amount of money is worth…

Q: What is the initial investment plus interest?

A: The total of initial investment and interest will give the total value or worth of the investment…

Q: Which are the several ways of defining the concept of rate of return on investment?

A: Answer: Return on investments is an instrument which can be used to calculate the company’s…

Q: What is the accounting rate of return?

A:

Q: How can we determine the borrowing rate of return?

A: The borrowing rate of return is the return that is charged on the borrowings made by the firms or…

Q: What are the different terms used to refer to the rate of return?

A: Rate of return is an expected profit on an investment by a investor. It is a rate at which investor…

Q: What is present value interest factor?

A: The present value interest factor is a mathematical equation used to estimate today's value of money…

Q: What is the internal rate of return? How is it used? How does it relate to the concept of compound…

A: The internal rate of return (IRR) is a capital budgeting metric used to gauge the benefit of…

Q: How VAT affects the interest rate?

A: Solution-Value Added Tax  A value-added tax (VAT) is a consumption tax placed on a product whenever…

Q: An investor purchased 50 shares of stock in a company for $50 per share. One year later, the…

A: Rate of Return = Total Profit / Purchase cost of shares

Q: How are Effective Interest Rates calculated?

A: Effective interest rate is the interest earned on the investment or saving account.

Q: $450,000. What will be the interest paid at the end of the term if the business risk percentage is…

A: Interest rate on loan will be based on the risk involved in the business and risk free interest rate…

Q: R150 000 is invested at a compound interest rate that is compounded quarterly. After 6 years the…

A: An annuity is a financial product or investment contract that provides a series of regular payments…

Q: How is NPW used as a Function of Interest Rate?

A: Present value computes the existing value of future benefits by discounting future worth with a…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.