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You are given a nominal annual rate of disc Hint: Let X be the value on 1/1/2010. The fut O <$10,500 O $10,500 but < $10,750 O $10.750 but < $11,000 O $11,000 but < $11,250 2

You are given a nominal annual rate of disc Hint: Let X be the value on 1/1/2010. The fut O <$10,500 O $10,500 but < $10,750 O $10.750 but < $11,000 O $11,000 but < $11,250 2

Essentials Of Investments
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
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You are given a nominal annual rate of discount of 12% convertible (compounded) quarterly. Determine the present value on 1/1/2010 of $20,000 to be paid on 1/1/2015. Hint: Let X be the value on 1/1/2010. The future value is $20,000. Recall for an effective rate of discount, d, A(t) = Ap*(1-d)t. You will need to adjust your formula to reflect the fact that the given rate is a nomi O < $10,500 O $10,500 but < $10,750 O $10,750 but < $11,000 O > $11,000 but < $11,250 O > $11,250
Transcribed Image Text:You are given a nominal annual rate of discount of 12% convertible (compounded) quarterly. Determine the present value on 1/1/2010 of $20,000 to be paid on 1/1/2015. Hint: Let X be the value on 1/1/2010. The future value is $20,000. Recall for an effective rate of discount, d, A(t) = Ap*(1-d)t. You will need to adjust your formula to reflect the fact that the given rate is a nomi O < $10,500 O $10,500 but < $10,750 O $10,750 but < $11,000 O > $11,000 but < $11,250 O > $11,250
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