3. To see the impact of the interest rate on an investment, (a) Invest $150,000 at...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
3. To see the impact of the interest rate on an investment, (a) Invest $150,000 at 5% for 30 years. Calculate the accumulated value of the $150,000 at time O and then at the end of each of the next 30 years. (3 marks) ... (b) Calculate the present value of $150,000 due in 1 year, 2 years, 3 years, 30 years. Assume the interest rate is 9%. (3 marks) For both (a) and (b), you should have 5 columns of calculations, assuming the given rate is a i. Effective rate of discount ii. Nominal rate of discount, compounded quarterly iii. iv. V. Nominal rate of interest, compounded continuously Nominal rate of interest, compounded quarterly Effective rate of interest (c) For (a) graph the yearly values just for the effective rate of discount and the effective rate of interest calculations on the same graph. Make sure your x-axis starts at time 0, not time 1. For (b), graph the yearly values just for the effective rate of discount and the effective rate of interest calculations on the same graph. Make sure your x-axis starts at time 0, not time 1 3. To see the impact of the interest rate on an investment, (a) Invest $150,000 at 5% for 30 years. Calculate the accumulated value of the $150,000 at time O and then at the end of each of the next 30 years. (3 marks) ... (b) Calculate the present value of $150,000 due in 1 year, 2 years, 3 years, 30 years. Assume the interest rate is 9%. (3 marks) For both (a) and (b), you should have 5 columns of calculations, assuming the given rate is a i. Effective rate of discount ii. Nominal rate of discount, compounded quarterly iii. iv. V. Nominal rate of interest, compounded continuously Nominal rate of interest, compounded quarterly Effective rate of interest (c) For (a) graph the yearly values just for the effective rate of discount and the effective rate of interest calculations on the same graph. Make sure your x-axis starts at time 0, not time 1. For (b), graph the yearly values just for the effective rate of discount and the effective rate of interest calculations on the same graph. Make sure your x-axis starts at time 0, not time 1
Expert Answer:
Posted Date:
Students also viewed these finance questions
-
1. When a limited partnership is formed A. The partnership activities are limited B. All partners have limited liability C. Some of the partners have limited liability D. None of the partners have...
-
The following information was taken from the financial statements of Coca-Cola and PepsiCo (dollar amounts in millions). Tax rates for Coca-Cola and Pepsi were 23 percent and 27 percent,...
-
Why is there a need for a consolidation entry when an intercompany inventory transfer is made at cost?
-
The administrator of Wright Hospital has presented you with a number of service projections for the year ending June 30, 20X6. Estimated room requirements for inpatients by type of service are: Of...
-
Maria Cardenas, a Latina woman, worked for Aramark as a housekeeper at McCormick Place convention center for over 20 years. It was a long-standing rule for employees that they could not remove any...
-
how lobg does it take for the following to happen 856 grows into 1122 at 7%
-
What is the time complexity of the following algorithm? public static void main() { int n1-10; int n2= 20; if(n2 = n1) for (int i = 0; i
-
Choose TWO of the following questions to answer. Expand upon the questions and incorporate life experiences where possible. What is the monetary contribution of the poultry industry to the U.S....
-
(a) State one possible project topic of interest to you, being careful to state it in the form of a question about a causal effect (as described in the project description document and in class). :...
-
What is the purpose of using the BSC in the IT strategic planning process? How does the BSC approach differ from previous measurement approaches? What are the four BSC perspectives?
-
Unveiling the Workforce Dynamics: A Comprehensive Analysis of Mining and Labor Economics in Zambia's Copperbelt Region I. Introduction A. Background 1. Overview of Zambia's Copperbelt Region The...
-
Bearwood Inc. completed Job No.D50 during 2021. The job cost sheet listed the following: Job No. D50 Costs for 12,000 units produced: Direct materials Direct labor Manufacturing overhead applied...
-
i need some help regarding capsim. im currently on round three but my products market share is the lowest amongst competitors so far. would anyone be able to take a look at my pictures and give me...
-
Where are the olfactory sensory neurons, and why is that site poorly suited for their job?
Study smarter with the SolutionInn App