Nominal annual rate of interest

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Reference no: EM13969795

1) Suppose you deposit $ 2,000 today and your account will acuumulate to $ 4,000 in 10 years. What is the nominal annual rate of interest, given semiannual compounding?

a. 7.18%

b. 3.53%

c. 7.05%

d. 7.00%

e. None of the above

2) HKL Co. plans a new project that will generate $ 170,000 of continuous cash flow each year for 6 years and additionally $ 250,000 at the end of the project. If the continuously compounded rate of interest is 11%, estimate the present value of the cash flows.

a. 875897.13

b. 1170000

c. 1203567.13

d. 1356987.13

e. None of the above

Reference no: EM13969795

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