AN INTEREST RATE OF 2% PER MONTH IS THE SAME AS: A. 24% PER YEAR B. A NOMINAL 24% PER YEAR, COMPOUNDED MONTHLY ???? C. AN EFFECTIVE 24% PER YEAR, COMPOUNDED MONTHLY ??? D. BOTH ''A'' and ''B''
Word problem with interest rates
An environmental testing company needs to purchase $40,000 worth of equipment 2 years from now. At an interest rate of 20% per year, compounded quarterly, the present worth of the equipment is closest to? A. $27,070 B. $27,800 C. $26,450 D. $28,220
A steel fabrication company invested $800,000 in a new shearing unit. At an interest rate of 12% per year, compounded monthly, the monthly income required to recover The investment in 3 years is closest to? A. $221,930 B. $31,240 C. $29,160 D. $26,570
The first cost of a fairly large flood control dam is expected to be $5 million. The maintenance cost will be $60,000 per year, and a $100,000 outlay will be required every 5 years. If the dam is expected to last forever, it's equivalent annual worth at an interest rate of 10% per year is closest to? A. $-576,380 B. $-591,58 ...continues
An investment of $50,000 resulted in uniform income of $10,000 per year for 10 years and a single amount of $5,000 in year 5. The rate of return on the investment was closest to? A. 10.6% PER YEAR B. 14.2% PER YEAR C. 16.4% PER YEAR D. 18.6% PER YEAR
FIVE YEARS AGO, AN ALUMNUS OF A SMALL UNIVERSITY DONATED $50,000 TO ESTABLISH A PERMANENT ENDOWMENT FOR SCHOLARSHIPS. THE FIRST SCHOLARSHIPS WERE AWARDED 5 YEARS AFTER THE MONEY WAS DONATED. IF THE AMOUNT AWARDED EACH YEAR (IE:, THE INTEREST) IS $5OOO, THE RATE OF RETURN EARNED ON THE FUND IS CLOSEST TO? A. 7.5% PER YEAR B. ...continues
A $10,000 municipal bond due in 10 years pays interest of $400.00 per year. If an investor purchases the bond now for $9,000 and holds it to maturity, the rate of return received by the investor will be closest to? A. 3.5% B. 4.2% C. 5.3% D. 6.9%
Consider the estimates below. If the alternatives are mutually exclusive and the MARR is 15% per year, the one(s) that shoild be selected is (are) ? Incremental Rate of Return, %, when Initial Alternative Compared with Alte ...continues
1) Acetate, Inc., has equity with a market value of $20 million and debt with a market value of $10 million. The cost of the debt is 14 percent per annum. Treasury bills that mature in one year yield 8 percent per annum, and the expected return on the market portfolio over the next year is 18 percent. The beta of Acetate's equit ...continues
1. If U.S. Treasury yields are as follows: 3 month 6.0% 6 month 6.3% 1 year 6.5% 2 year 6.6% 5 year 6.4% 10 year 7.5% 30 year 8.0% a. What is the expected yield on notes from year 1 to 2, assuming the PEH holds? b. What is the expected yield on notes from year 2 to 5, assuming th ...continues
