Calculate effective annual interest rate

Assignment Help Corporate Finance

Reference no: EM133017722

Question#1:

A. Distinguish between Effective Annual Interest Rate (EAR) and Annual Percentage Rate (APR)?

- EAR:

- APR:

B. For a monthly rate of 1.5%, Calculate Effective Annual Interest Rate (EAR) and Annual Percentage Rate (APR)?

- EAR =

- APR =

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Question#2:

Explain the relationship between the interest rate (YTM) and the bond price, use examples to prove your answer?

- Relationship:

- Example No.1

- Example No.2

- Comment:

aAW

Question#3:

Use the following table to calculate the discounted payback period if the discount rate i=10%?

T	Cash Out-Flow	Cash In-Flow
0	500,000
1		120,000
2		130,000
3		200,000
4		70,000
5		80,000
6		150,000

Attachment:- Corporate Finance.rar

Reference no: EM133017722

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