Develop an e?ective interest rate calculator.

Assignment Help Financial Econometrics
Reference no: EM131198000

Question 1

a. Use Goal seek to solve the question in a spreadsheet. Make sure you carefully document the steps you used in the spreadsheet.

b. Use Solver to solve the question in a spreadsheet. Make sure you carefully document the steps you used in the spreadsheet.

Next, develop an e?ective interest rate calculator.

c. The calculator you develop should satisfy the following speci?cations.

  • In the top cell the user enters the percentage nominal rate (like 7%).
  • In the next cell the user enters the annual frequency of the nominal rate, i.e., the n from jn.
  • In the next cell the spreadsheet calculates the effective daily rate of interest. (Assume 365 days in a year.)
  • In the next cell the spreadsheet calculates the effective weekly rate of interest. (Assume 52 weeks in a year.)
  • In the next cell the spreadsheet calculates the effective monthly rate of interest.
  • In the next cell the spreadsheet calculates the effective quarterly rate of interest.
  • In the next cell the spreadsheet calculates the effective half yearly rate of interest.
  • In the next cell the spreadsheet calculates the effective annual rate of interest.

Graph your results, displaying the log interest rate1 on the vertical axis and the nominal, then effective rates, on the horizontal axis (in the order given above).

Present your answers to the above questions in a spreadsheet, giving each solution on a separate sheet (labelled 'Part a', 'Part b', and 'Part c'). Your spreadsheet should be clearly labelled and easy to understand. Make sure you identify what the "inputs" and "outputs" are.

Reference no: EM131198000

Questions Cloud

Government interventions in the economy : Create an argument for or against the passage of such a law based on your conception of the ideas on the optimum size of government and on government interventions in the economy (Social Security is an intervention in the economy).
The various ways inflation can hinder economic activity : Discuss the various ways inflation can hinder economic activity. What are some strategies you might use in your life to deal with rising inflation? How might these strategies change if we experienced deflation?
Discuss the physical changes in boys and girls : Discuss the physical changes in boys and girls. Discuss how puberty affects emotional and social development in boys and girls.
Contributed to labor market rigidity in latin america : 1. What are some of the factors that have contributed to labor market rigidity in Latin America? Provide three explanations.
Develop an e?ective interest rate calculator. : ACST201 Financial Modelling. Next, develop an e?ective interest rate calculator. The calculator you develop should satisfy the following speci?cations.In the top cell the user enters the percentage nominal rate (like 7%)
Price measured in a common currency : If the price measured in a common currency) of a particular basket of goods is 13 percent higher in the U.S than it is in the United Kingdom, which country country's currency is overvalued, according to the theory of purchasing power parity? Explain.
Difference between monetary policy and fiscal policy : What is the difference between monetary policy and fiscal policy?
Think of an example of the principal-agent : Think of an example of the principal-agent that you experienced first-hand or read or heard about. What factors led to the problem? Were there serious adverse outcomes arising from the problem? Based on the course material, what suggestions can you o..
Identify the business problems of each of the given cases : Identify the business problems of each of the cases; describe the metaphor(s) used. Rank-order the critical issues stated in the cases Evaluate the proposed solutions. Are the solutions valid? Why or why not?

Reviews

Write a Review

Financial Econometrics Questions & Answers

  What should current rate be on 2-year treasury securities

One-year Treasury bills currently earn 1.40 percent. You expect that one year from now, 1-year Treasury bill rates will increase to 1.60 percent. If the unbiased expectations theory is correct

  What is the payback period without discounting cash flows

Consider the following four-year project. The initial after-tax outlay is $550,000. The future after-tax cash inflows for years 1, 2, 3 and 4 are: $175,000, $250,000, $280,000 and $200,000, respectively.

  What factors should take into consideration when evaluating

What factors should I take into consideration when evaluating a companies capital budgeting decisions based on thier annual report. Please explain which factors to look at and what to consider.

  Calculate total number of copies that publisher expects sell

Your finance text book sold 47,500 copies in its first year. The publishing company expects the sales to grow at a rate of 23.0 percent for the next three years, and by 6.0 percent in the fourth year.

  Hpw to disregard the tax shield from amortization of costs

A company will issue new 25-year debt with a par value of $1,000 and a coupon rate of 8%, paid annually. The tax rate is 40%. If the flotation cost is 3% of the issue proceeds, then what is the after-tax cost of debt

  Determine what is the projects year 0 net cash flow

Keiper, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.7 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be wo..

  Determine what is the present value of the investment

You have an investment with 16 quarterly cash flows of $2000. The first payment is 3 months from today. If the EAR is 9%, what is the present value of this investment

  Find how much should be prepared to pay for the stock

You believe that ABC company will pay a dividend of $2 on its common stock next year. Thereafter, you expect dividends to grow at a rate of 6% per year into the future. If you require a return of 12 percent on your investment

  Describes how to modify an acyclic graph g

describes how to modify an acyclic graph G to obtain a graph G' such that finding a shortest path in G' finds a shortest path in G that includes a given subset of nodes.

  Determine what will the annual cash flow be

If you put up $51,000 today in exchange for a 6.25 percent, 15-year annuity, what will the annual cash flow be

  What would appear in the year-end balance sheet

Construction costs incurred during the first year were $12 million and estimated costs to complete at the end of the year were $18 million. During the first year the company billed its customer $13 million

  What is the implied expected rate of return for company x

A friend comes to you with the following information on company X. He tells you that the company has price to earnings ratio (P0/E1) of 16 and a dividend payout ratio (D1/E1) of 40%.

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