Question
Explain the difference between simple interest and compound interest. Give examples using an unpaid (hypothetical) credit card balance, or other balance, and compare the EAR
Explain the difference between simple interest and compound interest. Give examples using an unpaid (hypothetical) credit card balance, or other balance, and compare the EAR with APR.
Define the concept of time value of money. Could the time value of money vary over time? Search different periods in economic history to find examples to support your argument.
Bonds could be short-term, medium term or long term. If you thought that interest rates were about to increase, which bond would be the worst to own and why? Relate your answer to the following bonds: a. 10-year, 5 percent coupon b. 10-year, 0 percent coupon c. 15-year, 5 percent coupon d. 15-year, 0 percent coupon
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