Suppose an investment offers to quintuple your money in 12 months (don’t believe it). What rate of return per quarter are you being offered?
Answer to relevant QuestionsWhat is the present value of an annuity of $6,000 per year, with the first cash flow received four years from today and the last one received 18 years from today? Use a discount rate of 8 percent. The present value of the following cash flow stream is $5,985 when discounted at 10 percent annually. What is the value of the missing cash flow? Solve for the unknown number of years in each of the following: This problem illustrates a deceptive way of quoting interest rates called add-on interest . Imagine that you see an advertisement for Crazy Judy’s Stereo City that reads something like this: “$2,000 Instant Credit! 17% ...Mega Software has 7.4 percent coupon bonds on the market with 9 years to maturity. The bonds make semiannual payments and currently sell for 105 percent of par. What is the current yield on the bonds? The YTM? The effective ...
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