A friend promises to pay you $1,000 two years from now if you lend hime $800 today.

Question:

A friend promises to pay you $1,000 two years from now if you lend hime $800 today. What annual rate of interest is your friend offering?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Fundamentals of Corporate Finance

ISBN: 978-0077861629

8th edition

Authors: Richard Brealey, Stewart Myers, Alan Marcus

See More Books

Question Posted: May 14, 2012 05:26 AM

See More Questions

A friend promises to pay you $600 two years from now if you loan him $500 today. What interest rate is your friend offering you?
What nominal annual rate of interest is paid on RRSP contributions of $1100 made at the end of each quarter for 15 years if the balance just after the last contribution is $106 000?
What is the nominal annual rate of interest at which money will triple itself in 12 years if compounded annually?
The Cano Company is decentralized, and divisions are considered investment centers. Cano has one division that manufactures oak dining room chairs with upholstered seat cushions. The Chair Division...
Abbreviated financial statements for Archimedes Levers are shown in Table 29.12 on the next page. If sales increase by 10% in 2014 and all other items, including debt, increase correspondingly, what...
A 120-kg block is supported by a rope which is wrapped 1 1/2 times around a horizontal rod. Knowing that the coefficient of static friction between the rope and the rod is 0.15, determine the range...
A market is partially complete if for any $m$ in the market and any real function $f$, then $f(m)$ is also in the market. In addition, there are other assets that are not traded. As an example,...
Wisconsin Wire (WW) has implemented a just-in-time inventory system for the production of its insulated wire. Inventories of raw material and work in process are so small that WW uses a Raw and...
Assume that the fuel inlet temperature is 25C. # Question 1. Calculate the adiabatic flame temperature of Methane (CH4) gas with theoretical air of 85%, 100% and 400%, for an inlet air temperature of...
Meg McIntyre opened a public relations firm called Pop Chart on August 1, 2018. The following amounts summarize her business on August 31, 2018: During September 2018, the business completed the...
Gillette is trading at $31.11.Call options with a strike price of $35 are priced at $.30.What is the intrinsic value of the option and what is the time value?
In Westlandia, the public holds 50% of M1 in the form of currency, and the required reserve ratio is 20%. Estimate how much the money supply will increase in response to a new cash deposit of $500 by...
The trial balance of Marvin's Fine Gems at December 31, 2017, is shown below: Additional data at December 31, 2017: a. Rent expense for the year, $48,000. b. The equipment has an estimated useful...
Ernie Hasana is self - employed as a virtual assistant. He will use the single filing status, and his only source of income was a net profit of $ 9 6 , 0 0 0 from his business. Ernie's partially...
Magic Realm, Incorporated, has developed a new fantasy board game. The company sold 45,500 games last year at a selling of $65 per game. Fixed expenses associated with the game total $819,000 per...
The sound level in St. Maria Goretti's Catholic Secondary School's cafeteria at lunch time is 63 dB. Meanwhile, the sound level in the school's chapel before class is 21 dB. How many times louder is...
Tracy Company, a manufacturer of air conditioners, sold 200 units to Thomas Company on November 17, 2024. The units have a list price of $650 each, but Thomas was given a 30% trade discount. The...
A capital budgeting project requires a cash investment of $1,600,000. The required rate of return is 12% and the investment will yield annual cash inflows over its useful life of four years. What is...
Of the _____________ viewer comments about our commercial we received, _____________ were negative. a. 68, nine b. 68, 9 c. sixty-eight, nine For the above sentence, write the correct letter in the...
To help you become familiar with the accounting standards, this case is designed to take you to the FASBs Web site and have you access various publications. Access the FASBs Web site at...
Simplify the expressions in Problems 1736. Assume that the variables are positive. a. -V0.1 c. V0.75 b. -V0.4 d. V0.05
Pratt Corp. started the accounting period with $30,000 of assets, $12,000 of liabilities, and $5,000 of retained earnings. During the period, the Retained Earnings account increased by $7,550. The...
Molpus Company was started January 1, 2013, and experienced the following events during its first year of operation: 1. Acquired $30,000 cash from the issue of common stock. 2. Borrowed $40,000 cash...
The following information is available for Pacilio Security Services Inc. for 2011, its first year of operations. Pacilio provides security services for local sporting events. The following summary...
Speedy Auto Repairs uses a job-order costing system. The company's direct materials consist of replacement parts installed in customer vehicles, and its direct labor consists of the mechanics' hourly...
3. A, B and C are partners sharing profits and losses equally. The balance sheet at 31st December 2020 is as follows. Assets Liabilities Amount Amount (RO) (RO) Creditors 5,000 Cash at Bank 3,000...
For each of the following program fragments, give an analysis of the running time. 1) sum = 0; for (int i = n; i > 0; i--) for (int j = 0; j

A friend promises to pay you $1,000 two years from now if you lend hime $800 today.

Question:

Step by Step Answer:

PV 800 FV 1000 No of yea...View the full answer

Fundamentals of Corporate Finance

Students also viewed these Accounting questions