Marco

October 10th 2005, 11:02 AM

hI there can anyone help me to understand this excercise please is urgent.

I do not understand if you first find a equilvalent rate that is suppose to use in the present value equation why do you use 2 rates to solve the present value equation despite you got a equivalent rate to resolve the complete example??????????????????????????????????

Find the present value at time 0 years of payments of $30 at the end of each quarter for 8

years. Use a nominal rate of interest of 5% a year convertible monthly.

if you find this quartely equivalent rate of 5.0209%

Why in the equation of present value it uses annual and quartely rates to get the result of 786.61 in spite i think i should use as a future value only 30 ???????????????????????????????????''''

I do not understand if you first find a equilvalent rate that is suppose to use in the present value equation why do you use 2 rates to solve the present value equation despite you got a equivalent rate to resolve the complete example??????????????????????????????????

Find the present value at time 0 years of payments of $30 at the end of each quarter for 8

years. Use a nominal rate of interest of 5% a year convertible monthly.

if you find this quartely equivalent rate of 5.0209%

Why in the equation of present value it uses annual and quartely rates to get the result of 786.61 in spite i think i should use as a future value only 30 ???????????????????????????????????''''