Problems Set 2 Fin 7000
Problem Set 2 FIN 7000(5pts) Problem 1 [SAIR to EAR Conversion] [Discounting & Compounding]: Fill in the table below for each of the following interest rates: Case: → = 0.12/1 =0.12[pic 1][pic 2] = = 0.12[pic 3][pic 4] = 1000/ = $786.627[pic 5][pic 6] → = 0.12/2 =0.06[pic 7][pic 8] = = 0.1236[pic 9][pic 10] = 1000/ = $780.984[pic 11][pic 12] → = 0.12/4 =0.03[pic 13][pic 14] = = 0.12550881[pic 15][pic 16] = 1000/ = $778.008[pic 17][pic 18] → = 0.12/12 =0.01[pic 19][pic 20] = = 0.1268250301[pic 21][pic 22] = 1000/ = $775.963[pic 23][pic 24]→ = e^0.12 -1 =0.1274968516[pic 25][pic 26] = 1000/ = $775.963[pic 27][pic 28] Compounding PV of $1000
Case Stated Annual Rate Periods Per Year Effective Annual Rate paid at t = 2 1 .12 1 0.12 $786.627 2 .12 2 0.1236 $780.984 3 .12 4 0.12550881 $778.008