ECONOMICS
FINANCIAL MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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How much must be invested today for $400 to be received 3 years from now, assuming an interest rate of 8%, quarterly compounding?
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$228.00
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$369.54
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$317.53
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$315.40
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Explanation:
Detailed explanation-1: -It is calculated by multiplying the first principal amount by one and adding the annual interest rate raised to the number of compound periods subtract one. The total initial amount of your loan is then subtracted from the resulting value. P is principal, I is the interest rate, n is the number of compounding periods.
Detailed explanation-2: -Thus, it will take 18.36 years.
Detailed explanation-3: -Answer and Explanation: The correct answer is d) $1, 116.14.
Detailed explanation-4: -An investment of $1, 000 made today will be worth $1, 480.24 in five years at interest rate of 8% compounded semi-annually.
There is 1 question to complete.