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- (1) What is the value at the end of Year 3 of the following cash flow stream if the quoted interest rate is 10%, compounded semiannually? (2) What is the PV of the same stream? (3) Is the stream an annuity? (4) An important rule is that you should never show a nominal rate on a time line or use it in calculations unless what condition holds? (Hint: Think of annual compounding, when INOM = EFF% = IPER.) What would be wrong with your answers to parts (1) and (2) if you used the nominal rate of 10% rather than the periodic rate, INOM/2 = 10%/2 = 5%?What is the value today of $4,300 per year, at a discount rate of 10 percent, if the first payment is received 6 years from today and the last payment is received 20 years from today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)What is the present value of $2,225 per year, at a discount rate of 9 percent, if the first payment is received 8 years from now and the last payment is received 23 years from now? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
- Given an interest rate of 4.8 percent per year, what is the value at date t = 10 of a perpetual stream of $3,200 payments that begins at date t = 20? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)What is the Discounted Present Value (DPV) if you expect to receive $8,000 in year 1, $9,000 in year 2 and $7,000 in year 3, when the interest rate is 8% in each year? Round your answer to one (1) decimal, do not write the dollar sign. Use the minus sign where appropriate.What is the value today of $5,100 per year, at a discount rate of 7.9 percent, if the first payment is received 6 years from today and the last payment is received 20 years from today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g.., 32.16.) Value today
- (Computation of Future Values and Present Values) Using the appropriate interest table, answer each of the following questions. (Each case is independent of the others.)(a) What is the future value of $7,000 at the end of 5 periods at 8% compounded interest?(b) What is the present value of $7,000 due 8 periods hence, discounted at 6%?(c) What is the future value of 15 periodic payments of $7,000 each made at the end of each period and compounded at 10%?(d) What is the present value of $7,000 to be received at the end of each of 20 periods, discounted at 5% compound interest?Given an interest rate of 5.7 percent per year, what is the value at t = 8 of a perpetual stream of $4,100 annual payments that begins at t = 18? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Value at t = 8 $a. If the one-year discount factor is 0.9217, what is the one-year interest rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) b. If the two-year interest rate is 8.5%, what is the two-year discount factor? (Do not round intermediate calculations. Round your answer to 4 decimal places.) c. Given these one- and two-year discount factors, calculate the two-year annuity factor. (Do not round intermediate calculations. Round your answer to 4 decimal places.) d. If the PV of $10 a year for three years is $25.54, what is the three-year annuity factor? (Do not round intermediate calculations. Round your answer to 4 decimal places.) e. From your answers to (c) and (d), calculate the three-year discount factor. (Do not round intermediate calculations. Round your answer to 4 decimal places.) a. Interest rate % b. Discount factor c. Annuity factor d. Annuity factor e. Discount factor
- Suppose you are going to receive $17,500 per year for five years. The appropriate interest rate is 10 percent. a-1. What is the present value of the payments if they are in the form of an ordinary annuity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a-2. What is the present value of the payments if the payments are an annuity due? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b-1. Suppose you plan to invest the payments for five years. What is the future value if the payments are an ordinary annuity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b-2. What is the future value if the payments are an annuity due? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c-1. Which has the higher present value, the ordinary annuity or annuity due? c-2. Which has the higher future value? a-1. Present…What is the value of the continuously compounded nominal interest rate r if the present value of 104 to be recieved after one year is the same as the present value of 110 to be received after two years? Please solve by hand and show all the steps of answer in order me to understand it at best :)Compute the present value if future value (FV) = $7,745, interest rate (r) = 8.1%, and number of years (t) = 11. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.):