Exam 6: Continuous Compounding and Discounting

Vida has just won a jackpot that will pay her $10,000 now, $10,000 in one year, and $10,000 in 2 years. What is the present value of this jackpot at the continuously discounted rate of 9%?

(Multiple Choice)

4.9/5

(29)

Question 21

What is the effective interest rate on 10% if interest is compounded continuously?

(Multiple Choice)

4.8/5

(42)

Question 22

Determine the value of $10,000 at the end of 3 years invested at 8 percent assuming continuous compounding.

(Multiple Choice)

4.8/5

(38)

Question 23

Calculate the effective annual rate if the nominal annual rate is 9 percent compounded continuously.

(Multiple Choice)

4.7/5

(39)

Question 24

If interest is at 8% and it is compounded continuously, what is the effective interest rate?

(Multiple Choice)

4.8/5

(41)

Question 25

Fred deposited $5,000 in an account that promised a nominal interest rate of 8% compounded continuously for his daughter who will be going to college in 18 years. How much will she have in the account in 18 years?

(Multiple Choice)

4.8/5

(42)

Question 26

City Bank offers a 7-year CD with a nominal rate of interest of 7.0%. If compounding occurs continuously, what is the effective annual rate?

(Multiple Choice)

4.7/5

(36)

Question 27

Brad deposited $5,250 into an account that earns 7% interest compounded continuously. How much money will he have in 15 years?

(Multiple Choice)

4.9/5

(44)

Question 28

Showing 21 - 28 of 28

Vida has just won a jackpot that will pay her $10,000 now, $10,000 in one year, and $10,000 in 2 years. What is the present value of this jackpot at the continuously discounted rate of 9%?

What is the effective interest rate on 10% if interest is compounded continuously?

Determine the value of $10,000 at the end of 3 years invested at 8 percent assuming continuous compounding.

Calculate the effective annual rate if the nominal annual rate is 9 percent compounded continuously.

If interest is at 8% and it is compounded continuously, what is the effective interest rate?

Fred deposited $5,000 in an account that promised a nominal interest rate of 8% compounded continuously for his daughter who will be going to college in 18 years. How much will she have in the account in 18 years?

City Bank offers a 7-year CD with a nominal rate of interest of 7.0%. If compounding occurs continuously, what is the effective annual rate?

Brad deposited $5,250 into an account that earns 7% interest compounded continuously. How much money will he have in 15 years?

The Role and Objective of Financial Management

The Domestic and International Financial Marketplace

Evaluation of Financial Performance

Financial Planning and Forecasting

The Time Value of Money

Fixed Income Securities: Characteristics and Valuation

Common Stock: Characteristics, Valuation, and Issuance

Analysis of Risk and Return

Capital Budgeting and Cash Flow Analysis

Mutually Exclusive Investments Having Unequal Lives

Capital Budgeting: Decision Criteria and Real Option Considerations

Capital Budgeting and Risk

The Cost of Capital

Capital Structure Concepts

Breakeven Analysis

Capital Structure Management in Practice

Dividend Policy

Working Capital Policy and Short-Term Financing

The Management of Cash and Marketable Securities

The Management of Accounts Receivable and Inventories

Lease and Intermediate Term Financing

Financing With Derivatives

Bond Refunding Analysis

Risk Management

International Financial Management

Corporate Restructuring

Filters