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1) If the investment needs the outlay of $400 today, and promises to pay $50 at t = 1, $350 at t = 2, and $150 at t = 3, what compound percentage return would you earn if you made investment?

2) Determine present value of= $20,000 to be received four years from now if discount rate is 10% and discounting is done:

a) Annually?
b) Quarterly?
c) Monthly?
d) Daily? (Assume all years have 365 days).

3) Determine the effective annual rate of interest for each of below?

a) 8% compounded quarterly.
b) 10% compounded semi-annually
c) 12% compounded monthly.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M915198

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