5. Under compund interest rate model, suppose effective discount rate is 5% (a) Calculate equivalent effective annual interest rate (b) Calculate equivalent nominal interest rate compounded quarterly (c) Calculate equivalent nominal discount rate compounded daily (assume 365 days per year) (d) Calculate equivalent force of interest (e) Calculate the discount function (f) Find the present value of $5,000 to be paid at the end of 3rd year.

5. Under compund interest rate model, suppose effective discount rate is 5% (a) Calculate equivalent effective annual interest rate (b) Calculate equivalent nominal interest rate compounded quarterly (c) Calculate equivalent nominal discount rate compounded daily (assume 365 days per year) (d) Calculate equivalent force of interest (e) Calculate the discount function (f) Find the present value of $5,000 to be paid at the end of 3rd year.

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section4.17: Amortized Loans

Problem 1ST

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