Identify the interest rate column and the number of period’s row that will be used for the following rates.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter B, Problem 1QS

To determine

Identify the interest rate column and the number of period’s row that will be used for the following rates.

Expert Solution & Answer

Explanation of Solution

Future value:

The future value is value of present amount compounded at an interest rate until a particular future date

1.

When annual rate is 8% and compounded quarterly. The interest rate column will be 2% and the number of periods will be 8 because, when future value is compounded quarterly, the number of years will be increased by four times and the rate of interest will decrease by quarter of the given interest rate.

2.

When annual rate is 12% and compounded annually. The interest rate column will be 12% and the number of periods will be 8.

3.

When annual rate is 6% and compounded semiannually. The interest rate column will be 3% and the number of periods will be 4 because when future value is compounded semiannually, the number of years will be doubled and the rate of interest will decrease by half of the given interest rate.

4.

When annual rate is 12% and compounded monthly. The interest rate column will be 1% and the number of periods will be 24, because the interest rate for each month will be 1% and number of period will be 24 because future value is estimated for 2 years.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Margin % this year investment opportunity?

I want to correct answer general accounting question

What is the margin % related to this year's investment opportunity?

Answer 2

Question

Chapter B, Problem 1QS

To determine

Identify the interest rate column and the number of period’s row that will be used for the following rates.

Expert Solution & Answer

Explanation of Solution

Future value:

The future value is value of present amount compounded at an interest rate until a particular future date

1.

When annual rate is 8% and compounded quarterly. The interest rate column will be 2% and the number of periods will be 8 because, when future value is compounded quarterly, the number of years will be increased by four times and the rate of interest will decrease by quarter of the given interest rate.

2.

When annual rate is 12% and compounded annually. The interest rate column will be 12% and the number of periods will be 8.

3.

When annual rate is 6% and compounded semiannually. The interest rate column will be 3% and the number of periods will be 4 because when future value is compounded semiannually, the number of years will be doubled and the rate of interest will decrease by half of the given interest rate.

4.

When annual rate is 12% and compounded monthly. The interest rate column will be 1% and the number of periods will be 24, because the interest rate for each month will be 1% and number of period will be 24 because future value is estimated for 2 years.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter B, Problem 1QS

To determine

Identify the interest rate column and the number of period’s row that will be used for the following rates.

Expert Solution & Answer

Explanation of Solution

Future value:

The future value is value of present amount compounded at an interest rate until a particular future date

1.

When annual rate is 8% and compounded quarterly. The interest rate column will be 2% and the number of periods will be 8 because, when future value is compounded quarterly, the number of years will be increased by four times and the rate of interest will decrease by quarter of the given interest rate.

2.

When annual rate is 12% and compounded annually. The interest rate column will be 12% and the number of periods will be 8.

3.

When annual rate is 6% and compounded semiannually. The interest rate column will be 3% and the number of periods will be 4 because when future value is compounded semiannually, the number of years will be doubled and the rate of interest will decrease by half of the given interest rate.

4.

When annual rate is 12% and compounded monthly. The interest rate column will be 1% and the number of periods will be 24, because the interest rate for each month will be 1% and number of period will be 24 because future value is estimated for 2 years.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter B, Problem 1QS

To determine

Identify the interest rate column and the number of period’s row that will be used for the following rates.

Expert Solution & Answer

Explanation of Solution

Future value:

The future value is value of present amount compounded at an interest rate until a particular future date

1.

When annual rate is 8% and compounded quarterly. The interest rate column will be 2% and the number of periods will be 8 because, when future value is compounded quarterly, the number of years will be increased by four times and the rate of interest will decrease by quarter of the given interest rate.

2.

When annual rate is 12% and compounded annually. The interest rate column will be 12% and the number of periods will be 8.

3.

When annual rate is 6% and compounded semiannually. The interest rate column will be 3% and the number of periods will be 4 because when future value is compounded semiannually, the number of years will be doubled and the rate of interest will decrease by half of the given interest rate.

4.

When annual rate is 12% and compounded monthly. The interest rate column will be 1% and the number of periods will be 24, because the interest rate for each month will be 1% and number of period will be 24 because future value is estimated for 2 years.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter B, Problem 1QS

To determine

Identify the interest rate column and the number of period’s row that will be used for the following rates.

Expert Solution & Answer

Explanation of Solution

Future value:

The future value is value of present amount compounded at an interest rate until a particular future date

1.

When annual rate is 8% and compounded quarterly. The interest rate column will be 2% and the number of periods will be 8 because, when future value is compounded quarterly, the number of years will be increased by four times and the rate of interest will decrease by quarter of the given interest rate.

2.

When annual rate is 12% and compounded annually. The interest rate column will be 12% and the number of periods will be 8.

3.

When annual rate is 6% and compounded semiannually. The interest rate column will be 3% and the number of periods will be 4 because when future value is compounded semiannually, the number of years will be doubled and the rate of interest will decrease by half of the given interest rate.

4.

When annual rate is 12% and compounded monthly. The interest rate column will be 1% and the number of periods will be 24, because the interest rate for each month will be 1% and number of period will be 24 because future value is estimated for 2 years.

Answer 6

Chapter B, Problem 1QS

To determine

Identify the interest rate column and the number of period’s row that will be used for the following rates.

Expert Solution & Answer

Explanation of Solution

Future value:

The future value is value of present amount compounded at an interest rate until a particular future date

1.

When annual rate is 8% and compounded quarterly. The interest rate column will be 2% and the number of periods will be 8 because, when future value is compounded quarterly, the number of years will be increased by four times and the rate of interest will decrease by quarter of the given interest rate.

2.

When annual rate is 12% and compounded annually. The interest rate column will be 12% and the number of periods will be 8.

3.

When annual rate is 6% and compounded semiannually. The interest rate column will be 3% and the number of periods will be 4 because when future value is compounded semiannually, the number of years will be doubled and the rate of interest will decrease by half of the given interest rate.

4.

When annual rate is 12% and compounded monthly. The interest rate column will be 1% and the number of periods will be 24, because the interest rate for each month will be 1% and number of period will be 24 because future value is estimated for 2 years.

Answer 7

Chapter B, Problem 1QS

To determine

Identify the interest rate column and the number of period’s row that will be used for the following rates.

Answer 8

Expert Solution & Answer

Explanation of Solution

Future value:

The future value is value of present amount compounded at an interest rate until a particular future date

1.

When annual rate is 8% and compounded quarterly. The interest rate column will be 2% and the number of periods will be 8 because, when future value is compounded quarterly, the number of years will be increased by four times and the rate of interest will decrease by quarter of the given interest rate.

2.

When annual rate is 12% and compounded annually. The interest rate column will be 12% and the number of periods will be 8.

3.

When annual rate is 6% and compounded semiannually. The interest rate column will be 3% and the number of periods will be 4 because when future value is compounded semiannually, the number of years will be doubled and the rate of interest will decrease by half of the given interest rate.

4.

When annual rate is 12% and compounded monthly. The interest rate column will be 1% and the number of periods will be 24, because the interest rate for each month will be 1% and number of period will be 24 because future value is estimated for 2 years.