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292 Chapter 8 Compound Interest: Future Value and Present Value CONCEPT QUESTIONS most preferred): 6% per mpound rate of return. How 1. For a six-month
292 Chapter 8 Compound Interest: Future Value and Present Value CONCEPT QUESTIONS most preferred"): 6% per mpound rate of return. How 1. For a six-month investment, rank the following interest rates (number one being "most preferred") fa annum simple interest, 0% compounded semiannually. 6% compounded quarterly. Explain your rankin 2. Suppose it took y years for an investment to grow from $100 to $200 at a fixed compound rate of return many more years will it take to earn an additional 3. $1007 b. $2002 c. $300? In each case, pick an answer from: (1) more than years, (ii) fewer than years, (iii) exactly a years. 3. Why is $100 received today worth more than $100 received at a future date? EXERCISE 8.2
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