Which of the following depicts the process of computing the present value of an interest-bearing term note with an unrealistic interest rate? a. PV = Principal Amount X PV Factor for single payment b. PV = (Principal Amount X PV Factor for single payment) + [(Principal Amount X Nominal Rate) X PV Factor for ordinary annuity)] c. PV = Installment Amount X PV Factor for ordinary annuity d. PV = [Installment Amount + (Remaining Principal Amount X Nominal Rate)] X PV Factor for single payment (for each year)
Which of the following depicts the process of computing the present value of an interest-bearing term note with an unrealistic interest rate? a. PV = Principal Amount X PV Factor for single payment b. PV = (Principal Amount X PV Factor for single payment) + [(Principal Amount X Nominal Rate) X PV Factor for ordinary annuity)] c. PV = Installment Amount X PV Factor for ordinary annuity d. PV = [Installment Amount + (Remaining Principal Amount X Nominal Rate)] X PV Factor for single payment (for each year)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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51. Which of the following depicts the process of computing the
a. PV = Principal Amount X PV Factor for single payment
b. PV = (Principal Amount X PV Factor for single payment) + [(Principal Amount X Nominal Rate) X PV Factor for ordinary annuity )]
c. PV = Installment Amount X PV Factor for ordinary annuity
d. PV = [Installment Amount + (Remaining Principal Amount X Nominal Rate)] X PV Factor for single payment (for each year)
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