(a) Find the present value of a payment of £500 made after 3 months using a simple rate of discount of 9% per annum. (b) What is the equivalent simple rate of interest per annum? (c) What is the equivalent effective rate of interest per annum? (d) What is the equivalent nominal rate of interest per annum convertible quarterly? (e) What is the equivalent nominal rate of discount per annum convertible quarterly? (f) What is the equivalent force of interest per annum?

(a) Find the present value of a payment of £500 made after 3 months using a simple rate of discount of 9% per annum. (b) What is the equivalent simple rate of interest per annum? (c) What is the equivalent effective rate of interest per annum? (d) What is the equivalent nominal rate of interest per annum convertible quarterly? (e) What is the equivalent nominal rate of discount per annum convertible quarterly? (f) What is the equivalent force of interest per annum?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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