Q. 1) If the investment needs the outlay of $400 today, also promises to pay $50 at t = 1, $350 at t = 2, also $150 at t = 3, what compound percentage return would you earn if you made investment?
2) Find out present value of= $20,000 to be received four years from now if discount rate is 10% also discounting is done:
a) Annually?
b) Quarterly?
c) Monthly?
d) Daily? (Suppose all years have 365 days).
3) Find out the effective annual rate of interest for each of below?
a) 8% compounded quarterly.
b) 10% compounded semi-annually
c) 12% compounded monthly.