Question
Please assist with the following questions: What is the present value of the following uneven cash flow stream? The annual intrest rate is 4%. 0
Please assist with the following questions:
What is the present value of the following uneven cash flow stream? The annual intrest rate is 4%.
0 4% | 1years | 2years | 3years | 4 years |
0 | $100 | $300 | $300 | - $50.00 |
Will the future value be larger or smaller if we compound an initial amount more often than annually 9e.g. semiannually, holding the stated (nominal) rate, constant)? Why?
What is the EAR corresponding to a nominal rate of 4% compounded seminnually? Compounded quarterly? Compunded daily?
What is the fututre value of 100 after 3 years undr 4% semiannual compunding? Quarterly compounding?
When will the EAR equal the nominal (quoted) rate?
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