Question
12. Assuming a discount rate of 6% p.a., the present value of $1000 to be received exactly ten years from today is __________. a. $551.82
12. Assuming a discount rate of 6% p.a., the present value of $1000 to be received exactly ten years from today is __________.
a. $551.82
b. $558.39
c. $568.27
d. $553.68
e. None of the answers listed above is within $0.10 of the correct answer.
13. Assuming a discount rate of 6% p.a., but with monthly compounding, the present value of $1000 to be received exactly ten years from today is __________.
a. $551.82
b. $558.39
c. $568.27
d. $553.68
a. None of the answers listed above is within $0.10 of the correct answer.
14. In which case will an investor receive the most interest (i.e., which of the following rates has the largest effective annual return)?
a. 4.14% p.a., compounded semiannually.
b. 4.12% p.a., compounded every 2 months (i.e., 6 times per year).
c. 4.09% p.a., compounded monthly.
d. 4.05% p.a., compounded daily (assume 365 days per year).
e. 4.00% p.a., compounded continuously.
f. There is not enough information provided to correctly answer this question.
15. In which case will an investor receive the most interest:
a. 16.14% p.a., compounded semiannually.
b. 16.12% p.a., compounded every 2 months (i.e., 6 times per year).
c. 16.09% p.a., compounded monthly.
d. 16.05% p.a., compounded daily (assume 365 days per year).
e. 16.00% p.a., compounded continuously.
f. There is not enough information provided to correctly answer this question
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