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What is the remuneration for capital?
Capital is monetary value, and the use of capital is generally called an investment. The remuneration received for capital is usually equity (share of a value, tangible or derivative). More specifically, capital that establishes equity in a corporation receives dividends, while money loaned receives interest. The relative effectiveness of an investment can be measured by the return on investment or ROI (the ratio of value received compared to value invested).
What is the definition of equivalent rate?
The equivalent rate refers to the interest rate that equates the future value of an investment or loan to its present value, considering different compounding periods or payment frequencies. It allows for the comparison of financial products with varying terms and compounding methods. For example, an annual nominal interest rate can be converted to an effective annual rate to reflect the true return on investment when compounded more frequently.
What is the value for required rate of return?
The value of the required rate of return would be the same percentage. The investment will not be purchased by a buyer if the percentage is not fixed, solidifying the rate of return when the investment is sold. The value may be more, however, but not less.
When interest is compounded the total time period is subdivided into several interest periods for example 1 year 3 months 1 month How does compound interest affect the future value of an investme?
The more often interest is compounded (the shorter the interval), the faster the total value of the investment grows, and the more it's worth after any given period of time.
How can i double an investment every ten weeks?
If you invest in any assets which yields 7.2% per week, then your investment will double. Rule of 72 states "The rule number (e.g., 72) is divided by the interest percentage per period to obtain the approximate number of periods (usually years) required for doubling." <><><> An investment that doubles in value every 10 weeks is generally a VERY risky investment. Safe investments will not normally have a rate of return of more than 500% a year.
Does the more compounding periods per year decreases the total amount of interest you receive over the year?
No. The more often it's compounded, the more interest you receive,and the faster your investment grows.
When using the net present value method for evaluating an investment an increase in the required rate of return will?
The increase in rate of return will make the investment more difficult to be accepted.
The difference between the amount of money received from selling an investmentand the amount of money spent to purchase the investment is known as?
If what you spent on the investment was less then what you received when you sold it, it is called your "profit". If what you spent on the investment was more then what you received when you sold it, it is called your "loss".
What does FV stand for in Excel?
It is a financial function. It returns the future value of an investment based on an interest rate and a constant payment schedule. So if you are paying in a set amount on a regular basis, like every month, and there is a fixed interest rate, it can work out how much your investment will be worth. See the link below for more details.
What is the difference in returns between an investment compounded daily versus compounded monthly?
The difference in returns between an investment compounded daily versus compounded monthly is that compounding daily results in slightly higher returns due to more frequent compounding periods, which allows for faster growth of the investment.
What is the present value formula?
It gives you the current value of an investment based on a fixed interest rate and payment schedule. See the link below for more information.
Would you pursue the investment if the net present value is negative?
No. Unless the non-financial value was more than enough to offset the expected financial loss.
