Which of the following nominal rates will earn the most interest?5% compounded quarterly (j4).5% compounded monthly (j12).5% compounded semi-annually (j2).5% compounded annually (jj).

The nominal rate of interest refers to the rate of interest on investment without considering the…

Answered: Which of the following nominal rates…

Which of the following nominal rates will earn the most interest? O 5% compounded quarterly (j4). O 5% compounded monthly (j12). 5% compounded semi-annually (j2). 5% compounded annually (jj).

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

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Which of the following nominal rates will earn the most interest?
5% compounded quarterly (j4).
5% compounded monthly (j12).
5% compounded semi-annually (j2).
5% compounded annually (jj).

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10. Find the per period rate and the APR (the stated interest rate) for each case: (Round Per period rate to 3 decimal places.) Effective Annual Intrest Rate Compounding Period Per Period Rate APR 10.00% 1 month 6.09% 6 months 8.24% 3 months
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18) Which of these is true regarding the following statement? "Interest rate is 6% compounded monthly". Select one: a. nominal interest rate = 18% b. nominal interest rate = 12% c. nominal interest rate = 1% d. nominal interest rate = 6% 19) What is the present value of $500.00 to be paid in two years if the interest rate is 5 percent? Select one: a. $476.25 b. $550.00 c. $500.00 d. $453.51 20) How many years will it take to double your investment of $ 2000 if it has an interest rate of 6% compounded annually? Select one: a. 24 years b. 20 years c. 12 years d. 10 years
Assume an effective compound interest rate i= 3% per annum. Compute the following equivalent rates. In each case, enter your answer as a percentage. a) The nominal interest rate payable semi-annually Number % Enter an answer correct to 4 decimal places. b) The effective interest rate payable quarterly Number Enter an answer correct to 2 decimal places. c) The effective rate of discount per annum Number Enter an answer correct to 2 decimal places. d) The nominal rate of discount payable monthly Number % Enter an answer correct to 4 decimal places.
The nominal interest rate compounded quarterly, ¿(4) is 6%. Let ¿ be the annual effective interest rate, d be the annual effective discount rate, d(12) be the nominal discount rate compounded monthly and be the annual constant force of interest. Calculate i + 2d + 3d(¹2) + 46. A 59.14% B 59.34% C 59.54% D 59.74% E 59.94%
Q6. What's the present value of a perpetutity that pays $1,524 per year if the aprropriate interest rate is 5.3 % ? Round answer to 2 decimal places?
13. A fixed income instrument with a stated annual interest rate of 18% and offers monthly compounding has an effective annual rate (EAR) closest to: A. 18.00%. В. 19.56%. С. 20.12%.
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Which of the following nominal and periodic interest rates is NOT equivalent to a nominal interest rate of 8% per annum, compounded annually (j₁ = 8%)? O 112= 7.720836% Oi-1.942655% O 12=7.846097% O imo=0,666667%
22.Calculate the present value (principal) and the compound interest (in $). Use Table 11-2. Round your answers to the nearest cent. CompoundAmount Term ofInvestment NominalRate (%) InterestCompounded PresentValue CompoundInterest $26,500 18 months 4 semiannually $ $

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