calculating the periodic interest rate, i幻灯片课件.pptVIP

Chapter 9 Compound Interest: Further Topics And Applications;Algebraic Method;Financial Calculator Method;Example;Solution:;j=i*m=7.20% compounded quarterly;Example;Solution:;For 3-year periods ended December 31 1994. Suppose the initial investment is $1000. The date the initial investment made is December 31, 1991. s=p(1+i1992)(1+i1993) (1+i1994) =$1000(1-4.8%)(1+46.9%)(1-1.4%) =$1378.91; Secondly, calculate the equivalent annually compounded rate of return. The equivalent annually compounded rates of return for the 3-year period ended December 31, 1994 is 11.30%. ;For 10-year period ended December 31, 1994 Suppose the initial investment is $1000. The date the initial investment made is December 31, 1984 s=p(1+i1985)(1+i1986)…(1+i1993)(1+i1994) =$1000 (1+28.1%)(1+7.5%)…(1+46.9%)(1-1.4%) =$2444.49 ; calculate the equivalent annually compounded rate of return The equivalent annually compounded rates of return for the 10-year period ended December 31, 1994 is 9.35%.;Example 9.1 D; $9480 have been worth $17,580 during the decade. The increase of initial investment results from the increase of Suncor stock and purchasing power at the same time. ;Method 1: Adjust $9480 10 years ago to current purchase power level.; S=$17580 p=$12771.67 The real rate of return is 3.25% compounded annually.;Method 2: Adjust $17580 now to 10 years ago purchase power level.;S=$13049.07 p=$9480 The real rate of return is 3.25% compounded annually.;Method 3: calculate the actual tae of return and rate of inflation, respectively.;6.370464%- 3.025309%=3.345155%