An investment is expected to make future returns at a rate of £1,800 per annum over the next 10- year period. Assuming a nominal discount rate of 5% per annum convertible quarterly, find the present value of the stream of future incomes if the payments are received: (i) quarterly in advance; (ii) (iii) annually in arrears; at the end of every 2 years.
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- Calculate the amount to which £18,600 will have accumulated after 16 years given an effective rate of interest of 6.1% per annum for the first 9 years and a nominal rate of discount of 8.3% per annum convertible monthly thereafter for the remaining years. Answer: CheckAn investment will provide a regular quarterly income after a deferred period of 5-years, starting with £2400 at the end of the first quarter and then consecutive payments decreasing by £50 at the end of each quarter over a 5-year term. Find the present value of this investment assuming a nominal rate of interest of 6.56% per annum convertible quarterly throughout the entire period. Hint: The first payment is payable in exactly 5 years and 3 months' time from now.Using an effective rate of interest of 8% per annum, calculate the CONVEXITY of the following series of payments: £300 payable after 4 years, £200 payable after 12 years, and £250 payable after 17 years.
- Suppose that an investment promises to pay a nominal 9.6 percent annual rate ofinterest. What is the effective annual interest rate on this investment assuming thatinterest is compounded (a) annually? (b) semiannually? (c) quarterly? (d) monthly? (e)daily (365 days)? (f) Weekly?An investment will provide a regular quarterly income after a deferred period of 3-years, starting with £2000 at the end of the first quarter and then consecutive payments decreasing by £50 at the end of each quarter over a 5-year term. Find the present value of this investment giving a nominal rate of interest of 2.26% per annum convertible quarterly throughout the entire period. no tables, only formulas, pleaseGiven an interest rate of 6.5 percent per year, what is the value at date t = 8 of a perpetual stream of $900 payments with the first payment at date t = 17?
- a. For an interest rate of 18% per year compounded continuously, calculatethe effective monthly and annual interest rates.b. An investor requires an effective return of at least 15%. What is the minimum annual nominal rate that is acceptable for continuous compounding?Calculate the annualised rate of return of an investment that, for an initial investment of £1900, produces a single payment of £4120 after 3 years, taxed at the rate of 10%. State your answer as a percentage to 3 significant figures.The interest rates over the next four (4) years are as follows:The annual effective interest rate is 7% for the first 1.5 years.The interest rate is 8% convertible quarterly for the subsequent year.The interest rate is 6% payable monthly for the subsequent 1.5 years.A payment of 1000 euros is to be received in 4 years. How much is the present value of this payment.At what single annual effective rate i will such present value yield the same interest?
- 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? Note: Please show how you compute each of the items.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.A one-year investment is certain to pay £650. If the annual interest rate is 6%. * Round your answer to the nearest pound. What is the present value of the payment on the day of the investment?