Question: For a given nominal interest rate, given years, and a given future cash flow, a decrease in the number of compounding periods per year will

For a given nominal interest rate, given years, and a given future cash flow, a decrease in the number of compounding periods per year will cause the present value to: Question 10 options: Remain the same

May increase, decrease or remain the same depending on the number of years until the money is to be received.

Decrease

Will increase if compounding occurs more often than 12 times per year and will decrease if compounding occurs less than 12 times per year.

Increase

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

For a given nominal interest rate, given years, and a given future cash flow, a decrease in the number of compounding periods per year will cause the present value to: Decrease May increase, decrease...

For a given nominal interest rate, given years, and a given future cash flow, a decrease in the number of compounding periods per year will cause the present value to

For a given nominal interest rate, given years, and a given future cash flow, an increase in the number of compounding periods per year will cause the present value to: May increase, decrease or...

wame: Week 13-14 Homework Quiz Math 107 Version 1 R= payment/deposit amount m = number of compounding periods per year P = present value T = interest rate (in decimal) t = time (in years) A. Future...

17. Which of the following statements is correct? a. Simple rates can't be used in present value or future value calculations because they fail to account for compounding effects. b. The periodic...

Question 7 (4 points) Which of the following statements is most correct? Whenever interest is paid or payments are made more frequently than annually, the periodic rate is less than the annual rate....

Future value of $\$ 1,000,000$ from an account bearing $3.62 \%$ interest compounded annually for 25 years. Find the payment per period necessary to reach a specified future value based on the...

Future value of $\$ 300,000$ from an account bearing $3.59 \%$ interest compounded semiannually for 35 years. Find the payment per period necessary to reach a specified future value based on the...

Future value of $\$ 750,000$ from an account bearing $3.27 \%$ interest compounded monthly for 25 years. Find the payment per period necessary to reach a specified future value based on the given...

Future value of $\$ 500,000$ from an account bearing $2.11 \%$ interest compounded quarterly for 30 years. Find the payment per period necessary to reach a specified future value based on the...

For the following system: R(s) Y(s), G1 G2 G3 + G4 G6 G5 Y(s) the transmittance gains are as follows: R(s) Solve the transfer function G1 = G2 G3 G4 1 1 4. Gs = Go = 2 Ensure the final output is a...

Drug use among college students in the United States was particularly heavy during the 1970s. Reporting on a study of drinking and drug use among college students in the United States in 1994, a...

1 . Working papers are reviewed at _ _ _ _ _ _ _ _ _ _ blank supervisory level ( s ) of a CPA firm . 2 . Managers and partners typically review at the _ _ _ _ _ _ _ _ _ _ blank of the engagement...

Draw a class diagram and its relationship based on the following statements. You can use any UML tool/software to represent your class diagram. Do NOT copy and paste your diagram, use the attachment...