Investment opportunity compounds annually

Assignment Help Business Management
Reference no: EM131218444

A person plans to save $1 for 20 years. They can invest at an annual rate of 10% (r = 0:1). This investment opportunity compounds annually(meaning that they receive interest payments at the end of each year). A second investment opportunity pays a return of r(tilde) x 100%, compounded every decade. (After one decade, the investment of one dollar yields 1 + r(tilde)) For what value of r(tilde) is the person indifferent between these two investments? (Assume that there is no chance that the person wants to cash in the investment before the 20 year period.) Explain the rationale behind your calculation.

Reference no: EM131218444

Questions Cloud

Recession and financial markets rescue package : The United States is subject to global security concerns. At the same time, a lingering recession and financial markets rescue package reduces the government's tax revenues and forces the government to increase its spending on unemployment benefit..
Rewrite the given document. : Rewrite the given document. - The document is based on the three business formations that are appropriate for Gloria;
How will those ideas influence your research : A sole proprietorship functions as a unique entity within a community. Does the sole proprietorship have a greater responsibility to the community than to internal stakeholders? Why or why not?
Develop a teaching plan for prevention of accidents : Develop a teaching plan for prevention of accidents and injuries in either children or the elderly. Include the main elements of your presentation to a group of parents or elderly or their caregivers.
Investment opportunity compounds annually : A person plans to save $1 for 20 years. They can invest at an annual rate of 10% (r = 0:1). This investment opportunity compounds annually(meaning that they receive interest payments at the end of each year). A second investment opportunity pays a..
How to split a dollar between themselves : Consider the following "divide the dollar" game. Two player P1 and P2 decides how to split a dollar between themselves. Players move sequentially. First, P1 moves. P1 can make any offer to p2 in increments of 25 cents;
Statistical concept of probability to real estate : Apply the statistical concept of probability to real estate. Find an article related to real estate, either residential or commercial property management, development or sales.
Cooperate profit and cooperate social responsibility : Purpose of a firm - Cooperate Profit and Cooperate social responsibility - Analyze the case in this in the above direction, please include the following concept as it relate to General Motors in the case analysis.
Analysis is an assessment of the strengths : Create a SWOT analysis of the location you have chosen for your Case Study Project. A SWOT analysis is an assessment of the strengths, weaknesses, opportunities, and threats facing this city/town (Newport News, VA).

Reviews

Write a Review

Business Management Questions & Answers

  Multiparty negotiations trustreputationexplain how you

multiparty negotiations trustreputationexplain how you would develop an effective negotiating team to work on

  Benefit of maintaining massive collection of data in cancer

Benefit of maintaining massive collection of data in cancer registries - Is there any real benefit to the purpose behind developing and maintaining this massive collection of data in the cancer registries?

  Conducting an internal analysis

Need assistance in selecting one, describe it, and apply it to a corporation (ex. find a company that has effectively used it) in 200-300 words.

  Compute and answer parts a through

Compute and answer parts a through and Include all calculations and spreadsheets in your post

  How is employee involvement encouraged in the workplace-

how is employee involvement encouraged in the workplace?- explain how does your current or previous workplace encourage

  Cost of capital used to evaluate a project should be cost

The cost of capital used to evaluate a project should be the cost of the specific type of financing used to fund that project, i.e., it is the after-tax cost of debt if debt is to be used to finance the project or the cost of equity if the project wi..

  Illustrate what is the reduction in work-in-process value

If the process makes one unit each hour on average and each unit is worth $1,500, illustrate what is the reduction in work-in-process value?

  What are the credit risks faced by retail banking

How does your bank assess credit risks and does your bank have an effective plan for managing and mitigating these risks? Explain.

  Prepare decision making tree

Meredith Delgado have a small company that has constructed software for organizing and playing music on a computer. Her software contains a number of rare features that she has patented so her firm's future has looked bright.

  The topic of: corporate transparency

Do you have a brilliant idea for a heading through the topic of: Corporate transparency and the positive effect on the willingness to share personal data (consumer)

  Which of kotter steps were actually implemented in change

Considering the change also using Kotter's information, where could the change have been better planned also implemented also explain why.

  The effects of war and peace on foreign aid

Use the Internet to research one (1) developing nation of your choice. The country of choice is (Somalia). Your research should include an examination of the effects that war and peace have on the distribution of foreign aid.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd