a) t=0? Assume the force of interest between time 0 and time 2 is 8(t)=0.04 +0.07t. Assume you are paid $1000 at time t = 2. What is the present value of this amount at time b) What nominal rate of interest compounded quarterly would be equivalent to this force of interest over the two year time period?.. : c) What rate of simple interest would cause the amount of money determined in part a) to grow to $1000 at time t = 2 ?? d) What rate of simple discount would cause $1000 at time t = 2 to have a present value equal to the amount determined in part a)? ?

a) t=0? Assume the force of interest between time 0 and time 2 is 8(t)=0.04 +0.07t. Assume you are paid $1000 at time t = 2. What is the present value of this amount at time b) What nominal rate of interest compounded quarterly would be equivalent to this force of interest over the two year time period?.. : c) What rate of simple interest would cause the amount of money determined in part a) to grow to $1000 at time t = 2 ?? d) What rate of simple discount would cause $1000 at time t = 2 to have a present value equal to the amount determined in part a)? ?

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 12MC: (1) What is the value at the end of Year 3 of the following cash flow stream if the quoted interest...

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