Which account produces the highest future value

Assignment Help Financial Management

Reference no: EM131313295

What is the relationship between compounding and discounting of a lump-sum? Complete the following: "The larger the interest rate, the (larger/smaller) the future value of a value today." Holding everything else the same, what is the effect of using a higher discount rate to discount a future value to the present?

If you invest the same amount in each of three accounts today, which account produces the highest future value if the annual percentage rate is the same?

Account A: annual compounding, Account B: quarterly compounding, Account C: continuous compounding.

Reference no: EM131313295

Questions Cloud

What are the factors of production : What are the factors of production? Is one factor more important than the others? If so, which one? Why?

Discuss about the blumbergs nursing home case : Blumberg's Nursing Home (BNH) is a 100-bed Medicare and Medicaid certified facility in suburban Philadelphia, PA. The administrator recently terminated the facility's Director of Nursing (DON), receptionist, and dietary aid for inappropriate condu..

What is the optimal shape geometry : What is the optimal shape geometry for a tensile specimen? Why? Which material was stiffer? Why? Did the values for E match the theory? If not, why? Which material was more resilient? (show calculation)

Calculate each firms new debt ratio : Two companies, Energen and Hastings Corporation, began operations with identical balance sheets. A year later, both required additional fixed assets at a cost of $25,000. Energen obtained a 5-year, $25,000 loan at a 10% interest rate from its bank. S..

Which account produces the highest future value : If you invest the same amount in each of three accounts today, which account produces the highest future value if the annual percentage rate is the same?

Realize the exorbitant price they were paying : Henry and Wilma, an elderly immigrant couple, agreed to purchase from Harris a refrigerator with a fair market value of $450 for twenty-five monthly installments of $60 per month. Henry and Wilmna now wish to void the contract, asserting that they di..

Time value of money-what rate have sales been growing : You have $36,471.40 in a brokerage account, and you plan to deposit an additional $4,000 at the end of every future year until your account totals $200,000. Sawyer Corporation's 2015 sales were $10 million. Its 2010 sales were $5 million. At what rat..

Why is culture so important to an organization : Why is culture so important to an organization? Can you think of examples of a great organizational culture? How about terrible organizational cultures? How are these reflected?

What is reynolds current debt ratio : Reynolds Construction needs a piece of equipment that costs $200. Reynolds either can lease the equipment or borrow $200 from a local bank and buy the equipment. If the equipment is leased, the lease would not have to be capitalized. What would be th..

User Account

All Pages