Present and future values for different interest rates

Assignment Help Financial Management
Reference no: EM131026185

Present and future values for different interest rates

Find the following values. Compounding/discounting occurs annually. Round your answers to the nearest cent.

An initial $700 compounded for 10 years at 8%.

An initial $700 compounded for 10 years at 16%.

The present value of $700 due in 10 year at a discount rate of 8%.

The present value of $2,800 due in 10 years at 16%.

The present value of $2,800 due in 10 years at 8%.

Define present value.

The present value is the value today of a sum of money to be received in the future and in general is less than the future value.

The present value is the value today of a sum of money to be received in the future and in general is greater than the future value.

The present value is the value today of a sum of money to be received in the future and in general is equal to the future value.

The present value is the value in the future of a sum of money to be received today and in general is less than the future value.

The present value is the value in the future of a sum of money to be received today and in general is greater than the future value.

-Select-IIIIIIIVVItem 6

How are present values affected by interest rates?

-Select-Assuming positive interest rates, the present value will increase as the interest rate increases. Assuming positive interest rates, the present value will decrease as the interest rate increases. Assuming positive interest rates, the present value will decrease as the interest rate decreases. Assuming positive interest rates, the present value will not change as the interest rate increases. Assuming positive interest rates, the present value will not change as the interest rate decreases.

Reference no: EM131026185

Questions Cloud

Suppose the yield curve were perfectly flat : Suppose the yield curve were perfectly flat, and a liquidity premium exists. Can we say anything about the market's expectations about future interest rates? If so, what?
Find the interest rates earned : Find the interest rates earned on each of the following. Round each answer to two decimal places. You borrow $650 and promise to pay back $702 at the end of 1 year. You borrow $93,000 and promise to pay back $131,923 at the end of 6 years.
What is the ficaoasdi for the er amount based : Question 1.1. What is the FICA-OASDI for the ER amount based on this total earnings figure? (Points : 3) $2,864.10$669.83$3,533.92$856.83
What distinguishes oligopoly from monopolistic competition : Why do oligopolies exist? List five or six oligopolists whose products you own or regularly purchase. What distinguishes oligopoly from monopolistic competition?
Present and future values for different interest rates : Find the following values. Compounding/discounting occurs annually. Round your answers to the nearest cent. An initial $700 compounded for 10 years at 8%. The present value of $700 due in 10 year at a discount rate of 8%. Define present value. The pr..
What is the pv of the investment : An investment offers 10,000 per year, with the first cash flow to be received today. If the relevant interest rate is 8% per year, what is the pv of the investment ( at year 0) ? should the answer be 135000? You can make 450 monthly payments for 5 yr..
Find the accrued interest-calculate the dirty price : You purchase a corporate bond with a settlement date on December 15 with a face value of $1,000 and a coupon rate of 83/4%, that has a listed price of 102:12, and that pays interest semi-annually on March 15 and September 15. How much must you pay? a..
Assume a market index represents the common factor : Assume a market index represents the common factor and all stocks in the economy have a beta of 1. Firm-specific returns all have a standard deviation of 39%. Suppose an analyst studies 20 stocks and finds that one-half have an alpha of 3.3%, and one..
Find value of k that makes probability density function : Find the value of k that makes this function a probability density function. Find P(Y1 ≥ 3Y2). That is, find the probability that the cleaning device reduces the amount of pollutant by one-third or more.

Reviews

Write a Review

Financial Management Questions & Answers

  Entities is most likely to use duration for hedging purposes

Which of the following entities is most likely to use duration for hedging purposes

  Holiday tours has employment contract with newly hired

Holiday Tours (HT) has an employment contract with its newly hired CEO. The contract requires a lump sum payment of $26 million be paid to the CEO upon the successful completion of her first three years of service. HT wants to set aside an equal amou..

  What is the implied rate of return on this stock

A stock will pay a dividend of $4 at the end of the year. It sells today for $100 and is expected to sell in one year for $105. What is the implied rate of return on this stock? Enter in percent and round to two decimal places. Please show work.

  What is required return using capital asset pricing model

what is the required return using the capital asset pricing model if a stock's beta is 1.2 and the individual, who expects the market to rise by 11.2%, can earn 4.4% invested in risk -free Treasury bill?

  Beginning to plan college savings accounts

Susan is beginning to plan college savings accounts for her two children. Her son Bobby is 8 and will begin college in 10 years when he turns 18. Her daughter Mallory is 2 and will begin college in 16 years when she is 18.

  Which two of the methods used to evaluate project

Which two of the methods used to evaluate project, and used to decide whether or not they should be accepted, do you prefer as a financial manager? Explain why you decided on these two and not the others. List the perceived deficiencies of the four n..

  What was your total real rate of return on this investment

Suppose you bought a bond with a coupon rate of 7.5 percent one year ago for $941. The bond sells for $949 today. If the inflation rate last year was 4 percent, what was your total real rate of return on this investment?

  Computing the present value of the firms free cash flow

The more cash the firm uses to repurchase shares, the less it has available to pay dividends. Free cash flow measures the cash generated by the firm after payments to debt or equity holders are considered. We estimate a firm's current enterprise valu..

  Dividend-increase event and dividend-cut event

Explain why stock prices shift around the declaration dates are expected or unexpected for each of the 3 dividend events (dividend-increase event, dividend-cut event, and unchanged-dividend event).

  Business ethics scenarios

A customer has a large sailing yacht on a vessel that your company will be discharging. The customer is present and is watching the off-loading operation. The five stevedores you manage pull off a very tricky maneuver, safely transferring the yacht t..

  Use the equation to find unlevered beta

Unlevered beta Harley Motors has $14 million in assets, which were financed with $2.8 million of debt and $11.2 million in equity. Harley's beta is currently 1.65 and its tax rate is 30%. Use the Hamada equation to find Harley's unlevered beta, bU.

  The largest percentage increase in price

Assume that all interest rates in the economy decline from 10% to 9%. Which of the following bonds would have the largest percentage increase in price?

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