* If (P) is principal amount, (i) is the rate of interest and (n) is the number of periods in years, then the interest factor is: O All choices None of the choices O (ni-1) O ni O (1+ni)
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- Which formula is correct for the compound interest calculation? Select one: a. P = F(1+i)^-n b. P = F/(1+in) c. P = F/(1+i/n)A) Explain under which conditions the uncovered interest rate parity condition could be expressed as 1+it = (1+r*)Et+1/EtAssume that the variables I, N, and PV represent the interest rate, investment or deposit period, and present value of the amount deposited or invested, respectively. Which equation best represents the calculation of a future value (FV) using: Compound interest? O FV = PV / (1+1)N O FV = PV + (PV XIX N) O FV = PV x (1 + I)N Simple interest? OFV = PV + (PV XIX N) O FV = PV XIX N O FV = PV/(PV XIX N)
- A. Assume that the variables I, N, and PV represent the interest rate, investment or deposit period, and present value of the amount deposited or invested, respectively. Which equation best represents the calculation of a future value (FV) using: Compound interest? FV = (1 + I)NN / PV FV = PV / (1 + I)NN FV = PV x (1 + I)NN B. Simple interest? FV = PV + (PV x I x N) FV = PV - (PV x I x N) FV = PV / (PV x I x N) C. Identify whether the following statements about the simple and compound interest methods are true or false. Statement True False After the end of the second year and all other factors remaining equal, a future value based on compound interest will never exceed the future value based on simple interest. All other variables held constant, investments paying simple interest have to pay significantly higher interest rates to earn the same amount of interest as an account earning compound…(a) Define effective interest rates and prove that r=| 1+ 1.What is (1 + i) n in the compound interest formula?
- To have a times interest earned of 8. Determine whether A. FinancialB. Nonfinanciala) DEFINE the following terminologies:i. Present valueii. Future valueiii. Periodiv. Interest rateFill in the blank with an appropriate word, phrase, or symbol. When using the simple interest formula, time, t, is expressed in the same period as the ______. When using the simple interest formula, time, t, is expressed in the same period as the ▼ principle intrest rate
- When using the interest tables, the needed interest rate is determined from the intersection between the _____________. a interest rate and number of periods b interest rate and factor type c number of periods of factor type d none of theseO e) Nonëôf the above 2. What's the Happropriate interest rate aji$3,620 INone of the above 800 afte anhThe value of the interest rate depends on the --------- of the time period. Select one: a. length b. size c. minimum d. maximum