Suppose that an investment promises to pay a real 9% annual rate of interest and inflation rate is 3%. What is the effective annual interest rate on this investment assuming that interest is compounded quarterly? PLEASE SHOW HOW YOU COMPUTE EACH OF THE ITEMS.

Q: An investment at 15% APR compounded monthly is equivalent to an effective annual interest rate of?

A: EAR formula: EAR=1+RMM-1 WHERE, R=rate of interest M=frequency of compounding

Q: if you invest P10,000 with a rate of interest of 12% compounded annually, compute the interest of…

A: Here, Investment Amount is P10,000 Interest Rate is 12% Inflation Rate is 10% Time Period is 10…

Q: If the nominal rate of interest is 10% per annum and there is quarterly compounding, the effective…

A: The question is based on the concept for calculation of effective interest rate.  Formula as :…

Q: Consider the case where the Annual Percentage Rate (APR) is 15%. If the frequency of compounding is…

A: Annual Percentage rate = 15% Compounding = Quarterly Number of compounding per year = 4

Q: How much is the sum of the present value of the expected return over those periods

A: Cash Flows (Year 1-10) (CF) =  $15,000 per year Annual interest rate (r) = 5% Time Period (t) = 10…

Q: What per annum nominal interest rate with interest compounded quarterly would be needed to achieve…

A: Compounding refers to the power of doubling the investment by adding interest .Compounding helps in…

Q: An investment pays you 9% interest, compounded quarterly. What is the periodic rate of interest?…

A: Using excel effective rate of interest function

Q: An initial investment amount P, an annual interest rate r, and a time t are given. Find the future…

A: Future value is the compounded value of an initial sum of money. It includes the initial amount as…

Q: Suppose that an investment promises to pay a nominal 9.6 percent annual rate of interest. What is…

A: According to the rule, we will answer the first three subparts, for the remaining subparts, kindly…

Q: Suppose that you borrow $60,000 at 9% compounded monthly over five years. Knowing that 9% represents…

A: Computation:

Q: Find the annual percentage yield for an investment at the following rates. (Round your answers to…

A: Annual percentage yield = [(1 + i/n)^n] - 1 where, i = nominal interest rate n = compounding period…

Q: 3. Suppose that an investment promises to pay a real 9% annual rate of interest and inflation rate…

A: given Real Rate of Interest 9% Inflation 3%

Q: What rate of interest, compounded annually, would yield the same return after two years? (Answer in…

A: Information Provided: Earnings in first year = 0% Earnings in second year = 20.7%

Q: Find the annual percentage yield for an investment at the following rates. (Round your answers to…

A: A. Annual percentage yield (APY)= (1+ r/n)^nt -1 r= Rate of interest e= Exponential function nt=…

Q: Assume the annual interest rate is 6%. Calculate the value of an investment that pays $100 every two…

A: Present value of perpetuity is = cash flow/rate

Q: A nominal interest rate of 11.333%, continuously compounded, yields an effective annual interest…

A: Effective annual rate = e^r - 1 where, r= nominal interest rate

Q: What is the annual effective interest rate equivalent to a nominal rate of 12 percent a year? Yanıt:

A: The effective rate of interest is an important technique in the case of multi-period compounding. If…

Q: An investment of $185,575 is expected to generate returns of $65,000 per year for each of the next…

A: Internal rate of Return:  IRR is a discounting cash flow technique gives rate of return earned by…

Q: If money is invested at an interest rate of 5.7 percent per year, find the annual percent yield…

A: Effective yield or the APY takes into consideration the number of times compounding is done in a…

Q: If an investment of $45,000 is earning an interest rate of 4.00%, compounded annually, then it will…

A: The number of years that will take to reach $53,686.19 at given interest rate can be calculated…

Q: What per annum nominal interest rate with interest compounded quarterly would be needed to achieve…

A: The present value function or concept can be used to determine the present value of a future sum or…

Q: A series of four annual constant-dollar payments beginning with $50,000 at the end of the first year…

A: Constant dollar analysis: The payment of $50,000 from the end of the first year growing at 8% for…

Q: What is the annualized investment rate % on a Treasury bill that you purchase for 9310 that will…

A: Value at the maturity (F) = 9533 Purchase price (P) = 9310 n = 91 days

Q: When interest is compounded continuously, the rate of change of the amount x of the investment is…

A: Continuous Compounding interest assumes interest is compounded and added back into the balance an…

Q: For the investment situation below, identify the annual interest rate, the length of the investment…

A: Given, rate =8% years = 10

Q: What is the equivalent simple interest (yield) for an investment of 8 % compounded quarterly? Round…

A: Effective Annual Rate The effective annual rate of interest is the actual or the real rate of…

Q: For a present sum of $620,000, determine the annual worth (in then-current dollars) in years 1…

A: Present sum = 620000 i = 12% inflation rate = 5% n=7 years PW = 620000(A/P,12%,7) =620000(0.2191177)…

Q: You are comparing two investments. The first pays 3 percent interest per month, compounded monthly,…

A: a) i) First investment: Rate of interest i =3% per month Number of compounding periods in one half…

Q: ou have purchased a three-year inflation-indexed investment. This investment will pay you $X every…

A: Here, Inflation Rate is 0.5% every six month Annual rate of Return compounding semi annually is 6%…

Q: Suppose that an investment promises to pay a real 9% annual rate of interest and inflation rate is…

A: Answer Real interest rate = 9% Inflation = 3% Quarterly compounding

Q: An investment provides a 1.25% return quarterly, its effective annual rate is

A: Effective Annual Rate = ( 1 + Rate of Interest)^4 -1

Q: What is the effective annual interest rate of an investment that pays 6.5% annual interest,…

A: EAR is the actual rate of return investment or loan generates after taking compounding into account.…

Q: What is the effective annual rate on an investment that pays an interest rate of 8.25% continuously

A: in this we have to calculate the exponential form and find out effective interest rate.

Q: You are offered an investment with a quoted annual interest rate of 6% with quarterly compounding of…

A: Interest rate (r) = 6% Number of compounding per year (m) = 4Tutor Dashboard - Course Hero

Q: A similar application for investment yields can be made in cases where monthly cash annuities will…

A: PRESENT VALUE 51593 NPER (n)  240 PMT 400 FUTURE VALUE 0

Q: Find the effective rate of interest for an investment that earns 27 1/7% per year, compounded…

A: Annual interest rate  (r)= 27 1/7% = 27.142857142857143% Mathematics constant for continuous…

Q: Find the effective annual rate for an investment that pays APR of 4.5% with Annual compounding…

A: The effective rate of interest is the actual rate of interest after compounding. The effective rate…

Q: Suppose that an investment promises to pay a nominal 9.6 percent annual rate of interest. What is…

A: Given information: Rate = 9.6% The effective annual interest rate is the real return paid on savings…

Q: What is the effective annual interest rate on this investment assuming that interest is compounded…

A: Effective Annual Interest Rate = (1 + (Nominal Interest rate / Number of compounding…

Q: Find the annual percentage yield for an investment at the following rates. (Round your answers to…

A: b)Calculation of annual percentage yield at 9% compounded continuouslyNote: Use the scientific…

Q: An investment product promises semi-annual cashflows of $3,500 for the next 5 years. If the stated…

A: In this we have to calculate semiannual effective interest rate and than calculate the present value…

Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.