Calculate nominal interest rate, Taxation

You have been offered a unique investment opportunity today; you will receive $500 one year from now. If you invest $10,000 today, you will receive $500 one year from now, $1500 two years from now, and $10,000 ten years from now?

a) What is the NPV of the opportunity if the interest rate is 6%?  Should you take the opportunity?

b) What is the NPV of the opportunity if the interest rate is 2% per year? Should you take it now?

What is the present value of $1000 paid at the end of each of the next 100 years if the interest rate is 7% per year?

You have found there investment choices for a one- year deposit: 10% APR compounded monthly, 10% APR compounded annually, and 9% APR compounded daily. Compare the EAR for each for each investment choice. (Assume that there are 365 days in the year.)

Oppenheimer Bank is offering a 30-year mortgage with an EAR of 53/8% .If you plan to borrow $150,000, what will your monthly payment be?

If the rate of inflation is 5%, what nominal interest rate is necessary for you to earn a 3% real interest rate on your investment?

Your best taxable investment opportunity has an EAR of 4%. Your best tax-free investment opportunity has an EAR of 3%.  If your tax rate is 30%, which opportunity provides the higher after-tax interest rate?

Posted Date: 3/4/2013 7:49:43 AM | Location : United States

Related Discussions:- Calculate nominal interest rate, Assignment Help, Ask Question on Calculate nominal interest rate, Get Answer, Expert's Help, Calculate nominal interest rate Discussions

Write discussion on Calculate nominal interest rate
Your posts are moderated
Related Questions
Based on the information provided, you are to complete a 2011 Form 1040 and any supporting schedules/forms for Dave and Amy Smith. You do not need to prepare a state tax return. Yo

The Madison Restaurant was formed a S corporation at the end of last year. Bob Buron, owns 60% of the stock, manages the restaurant. Ray Huges owns the remaining 40%

a) Using the above information you are to construct Fiona's Cash Flow Statement and then explain to her the importance of creating a surplus budget. b) The Net Worth Statement e

T ax Haven A country with tax-preference laws for foreign organization and individuals. 3 classes of jurisdictions are provided to as tax havens those are (1) levy taxe

"The $3,600 of property taxes for the house were prorated with $1,950 being apportioned to the seller and $1,650 being apportioned to the buyer. In December of the current year the

The XYZ Corporation has total earnings of $20 million and decides to pay its stockholders a dividend of $8 million. If the corporate tax rate is 30% and the personal tax rate on in

Provide at least 4 reasons why a firm may prefer to repurchase stock than to pay out dividends. What factors have influenced the strong growth in repurchase over the last two decad

The Johnson family went to dinner at Pasta Palace. Mr. Johnson ordered a meal for $6.25;Mrs.Johnson ordered a meal for $ 7.50; the 2 children ordered individual pizza for $ 4.99 ea

John and Ellen Brite are married and file a joint return. John owns an unincorporated specialty electrical lightning retail store, Brite-On had the following assets on January 1, 2