Question
Consider a future value of $1,000, 6 years in the future. Assume that the nominal interest rate is 18.00%. Assume that there is semiannual compounding.
Consider a future value of $1,000, 6 years in the future. Assume that the nominal interest rate is 18.00%.
Assume that there is semiannual compounding.
Entering PMT=0 and a FV=$1,000 into a financial calculator, along with the appropriate periodic interest rate and value of N, yields a present value of approximately $ _______________ with semiannual compounding.
Assume that there is quarterly compounding.
Entering PMT=0 and a FV=$1,000 into a financial calculator, along with the appropriate periodic interest rate and value of N, yields a present value of approximately $______________ with quarterly compounding.
Suppose now that the cash flow of $1,000 occurs only 1 year in the future.
Assume that there is monthly compounding.
Entering PMT=0 and a FV=$1,000 into a financial calculator, along with the appropriate periodic interest rate and value of N, yields a present value of approximately $___________ with monthly compounding.
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