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emmanuel yeboah emmanuel yeboah
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9 years ago
 1/Determine the future value if $5000 is invested in each of the following situations.

a. 5% for 10 years
b.7% for 7 years
c. 9% for 4 years

2/ What is the Present Value of $359000 that is to be received at the end of 23 years if the discount rate is 11%.
a. How would your answer change in part(a) if the %359000 is to be received at the end of 20years?

3/Describe how interest rate may adjust to an unanticipated increase in inflation?

4/ Assume investors expect a 2.0 percent real rate of return over the next year. If inflation is expected to be 0.5 percent, what is the expected nominal interest rate for a one year US Treasury ?

5/ Inflation is expected to be 3 percent over the next year. You desire an annual real rate of return of 2.5 percent on your investments.
a.What nominal rate of interest would have to be offered on a one year Treasury security for you to consider making an investment
b. A one year corporate debt security is being offered at 2 percentage points over the one year treasury security rate that meets your requirement . What would be the nominal interest rate on the corporate security.
a. Government debt rate
b. corporate debt rate

6/ What would be the Future Value  of $19378 invested now if the money remains deposited for 8 years , the annual interest rate is 18% and interest on the investment in compounded semi annually?
a. How would your answer change for (a) if quarterly compounding were used?
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wrote...
#1
Staff Member
Educator
9 years ago
Quote from: emmanuel yeboah (9 years ago)
1/Determine the future value if $5000 is invested in each of the following situations.

a. 5% for 10 years
b.7% for 7 years
c. 9% for 4 years

a) A = 5000(1+0.05)^10 =8144
b) A = 5000(1+0.07)^7 = 8029
c)A=5000(1+0.09)^4 = 7057 dollars


Quote from: emmanuel yeboah (9 years ago)
2/ What is the Present Value of $359000 that is to be received at the end of 23 years if the discount rate is 11%.
a. How would your answer change in part(a) if the %359000 is to be received at the end of 20years?

Use a financial calculator or computer software program to
answer the following questions.
a. What is the present value of $359,000 that is to be received at
the end of twenty-three years, the discount rate is 11 percent,
and semiannual discounting occurs?
b. How would your answer for (a) change if monthly discounting
were used?

a) PV = $30,583.09
b) PV = $28,929.62 and here is the electronic online program that does it for you:
Mastering in Nutritional Biology
Tralalalala Slight Smile
emmanuel y. Author
wrote...
#2
9 years ago
Quote from: emmanuel yeboah (9 years ago)
1/Determine the future value if $5000 is invested in each of the following situations.

a. 5% for 10 years
b.7% for 7 years
c. 9% for 4 years

2/ What is the Present Value of $359000 that is to be received at the end of 23 years if the discount rate is 11%.
a. How would your answer change in part(a) if the %359000 is to be received at the end of 20years?

3/Describe how interest rate may adjust to an unanticipated increase in inflation?

4/ Assume investors expect a 2.0 percent real rate of return over the next year. If inflation is expected to be 0.5 percent, what is the expected nominal interest rate for a one year US Treasury ?

5/ Inflation is expected to be 3 percent over the next year. You desire an annual real rate of return of 2.5 percent on your investments.
a.What nominal rate of interest would have to be offered on a one year Treasury security for you to consider making an investment
b. A one year corporate debt security is being offered at 2 percentage points over the one year treasury security rate that meets your requirement . What would be the nominal interest rate on the corporate security.
a. Government debt rate
b. corporate debt rate

6/ What would be the Future Value  of $19378 invested now if the money remains deposited for 8 years , the annual interest rate is 18% and interest on the investment in compounded semi annually?
a. How would your answer change for (a) if quarterly compounding were used?
wrote...
#3
Staff Member
Educator
9 years ago
Only questions 1 and 2 answered.
Mastering in Nutritional Biology
Tralalalala Slight Smile
Answer accepted by topic starter
emmanuel y. Authoremmanuel y.
wrote...
#4
Posts: 3
Rep: 0 0
9 years ago
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