Equivalent simple interest rate

Assignment Help Finance Basics
Reference no: EM132432823

Question 1: Your friend deposits $2,500 into a savings account for 5 years. The account pays 14.1% p.a compounding quarterly. The equivalent simple interest rate expressed on a per annum basis is is (as a percentage rounded to three decimal places; don't use % sign):

Question 2: You have the alternative of paying for university fees today for a payment of $16,000 or, you can select a payment plan where you pay $7,000 in 11 months from today and another $10,000 in exactly 24 months from today. If the interest rate is 10.1%p.a. compounding monthly, what is the advantage that the payment plan has over the upfront payment? (expressed in present day value rounded to the nearest cent; do not show $ sign or comma separators; if the payment plan is more costly than $16,000 today, your answer will show a negative eg. -300.35)

Question 3: You invested $1,000 in a savings deposit 5 quarters ago and it has grown to $1605 today. What nominal rate of annual interest (compounding quarterly) did you earn? (expressed as a percentage to two decimal places; don't use the % sign)

Question 4: Your business will pay you distributions of $16,000 in 12 months and another $13,000 in 23 months. If the discount rate is 7% per annum (compounding monthly) for the first 15 months, and 9% per annum (compounding monthly) for the next 8 months, what single amount received today would be equal to the two proposed payments? (answer to nearest whole dollar; do not use $ sign or commas)

Question 5: Suppose you will receive $17,000 in 7 months and another $10,000 in 23 months. If the discount rate is 6% per annum (compounding monthly) for the first 10 months, and 13% per annum (compounding monthly) for the next 13 months, what single amount received today would be equal to the two proposed payments? (answer to the nearest whole dollar; don't include the $ sign or commas)

Reference no: EM132432823

Questions Cloud

Which president was not supported by the american people : Which president do you believe was not supported by the American people? Support your answer with details and analysis from one or more political cartoons.
Describe three elements that can cause uncertainty : Describe three elements that can cause uncertainty within an enterprise's cash budget and provide your rationale for including each element.
Calculate Goodman Bees net working capital : Cash and marketable securities = $550,000, accounts receivable = $1,100,000, inventory = $1,600,000, Calculate Goodman Bees' net working capital
Describe economic and social changes of the united states : Describe the economic and social changes of the United States in the 1950s and identify the problems associated with the change.
Equivalent simple interest rate : Your friend deposits $2,500 into a savings account for 5 years. The account pays 14.1% p.a compounding quarterly. The equivalent simple interest rate
Discuss the concepts of traffic : Discuss the three concepts of "Traffic," "Conversion," and "Revenue" as they relate to that website. For example, for "Conversion," is the website operator
Calculate the times interest earned ratio : The Sales are $1.59 million, cost of goods sold is $645,000, Use the above information to calculate the times interest earned ratio for LaTonya's Flop Shops Inc
Interest rates impact investment decisions : How would the increase in interest rates impact the Reward-to-Volatility (Sharpe) ratio?
How did the industrial revolution affect your minority group : How did the Industrial Revolution affect your chosen minority groups? Analyze how the Progressives brought reform to your selected minority groups.

Reviews

Write a Review

Finance Basics Questions & Answers

  What impact would decline have on financial instruments

What impact would that decline have on other financial instruments? (Mortgages, Money Market Instruments, Stock)

  What is the price of hockey skates in the united states

Suppose hockey skates sell in Canada for 165 Canadian dollars, and 1 Canadian dollar equals 0.71 U.S. dollars. If purchasing power parity (PPP) holds, what is the price of hockey skates in the United States?

  Calculate the company return on equity

Calculate the company's return on equity and explain whether the managers are providing a good return on the capital provided by the company's shareholders

  How long did a unit of inventory sit on the shelf before

Average inventory is $415,435 and cost of goods sold is $1,410,000. On average, how long did a unit of inventory sit on the shelf before it was sold?

  How much interest rate would you have effectively paid

If you spend 1,000 using this credit card. How much will you have to pay in 1 year to settle your account. How much interest rate would you have effectively

  What will be the value of firm shareholders stake

Firm A has a market value of $6,000 with 150 shares outstanding and a price per share of $40. Firm B has a market value of $800 with 40 shares outstanding.

  What was your rate of return

(a) What was your rate of return? (b) What was your dividend yield? (c) What was the capital gains yield?

  Calculate the profit as a percent of the premium paid

Calculate the profit as a percent of the premium paid

  What is the npv of renovating old line

The alternative to investing in the new production line is to overhaul the existing line, which currently has both a book value and a salvage value of $0.

  Compute the missing amounts in the following table

Specifically, analyze the company's sales growth, profits, profits as a percentage of sales, and dividends declared as a percentage of net income (dollar amounts in billions)

  What is your average holding period return per year

Suppose that exactly 2 years ago you bought a a12% annual coupon bond for $1000. The bond had 13 years to maturity. Today the yield-to-maturity declined to 11% and you decide to sell. What is your average holding period return per year?

  Compute Accel Companies current ratio

Evaluating current ratio Compute Accel's Companies' current ratio at May 31, 2016 and 2015.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd