What will $800 be worth in 3 months if the nominal rate of interest is 25% and: i. interest is compounded every 5 hours? ii. interest is compounded monthly?

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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What will $800 be worth in 3 months if the nominal rate of interest is 25% and:
interest is compounded every 5 hours?
i.
ii. interest is compounded monthly?
(b) Determine the nominal interest rate if an investment of $20 grew to $30 after 2 years
and interest was compounded semi-annually.
(c) A certain asset compounds interest continuously in its first 5 years and quarterly in its
remaining 2 years. Determine the present value of this investment if it is worth $1200
after 7 years and the asset's nominal interest rate remains fixed at 6% throughout the
life of the asset.
101 words
1284
MAR
12
Transcribed Image Text:File Edit Insert Format Arrange View Share Window Help Untitled 2 Edited 125% v T View Zoom Insert Table Chart Text Shape Media Comment What will $800 be worth in 3 months if the nominal rate of interest is 25% and: interest is compounded every 5 hours? i. ii. interest is compounded monthly? (b) Determine the nominal interest rate if an investment of $20 grew to $30 after 2 years and interest was compounded semi-annually. (c) A certain asset compounds interest continuously in its first 5 years and quarterly in its remaining 2 years. Determine the present value of this investment if it is worth $1200 after 7 years and the asset's nominal interest rate remains fixed at 6% throughout the life of the asset. 101 words 1284 MAR 12
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