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The number of payments is directly related to the interest rate.

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Q: The number of payments in future cash flow has what relationship to interest rate?
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What future trading systems are available?

There are quite a number of future trading systems available. Some of the best options for this are InteractiveBrokers, OptionsExpress, and TDAmeriTrade.


What does a high times interest earned indicate?

A high Times Interest Earned (TIE) value indicates that the business entity is able to make the interest payments it owes on debt, eg if they took out a loan, the TIE is how much of the Interest from the loan they have earned back from whatever the loan was used to buy or invest in. A high number value indicates that they are earning more than what they must pay back in Interest, which means that the money from the loan was properly used. A high number can also mean the following: a) The business has very little "Leverage", this is undesirable as more leverage from debt is preferable to debt with no leverage. b) The business pays down too much of its debt from its earnings, which means that they are not using their incoming funds to take advantage of investment opportunities that could result in a higher rate of return. This is symptomatic of conservative businesses that do not like to expand, or do not borrow money, float shares or seek outside assistance when financing


What is relationship between a bond coupon rate and its duration?

bond coupon rates and yield rates have very similar effects and a very similar relationship to duration, lemme explain, by first explain durations effects in relation to interest rates, then yields and finally you can surmise that relationship between yield rates will be the same as coupon rates Duration can be seen as the elasticity of the bond's price with respect to interest rates. When duration is 7, a 15 year bond will fall 7% in value if interest rates increase by 1%. In the data we've generated we can also determine the relationship between yields and duration by analyzing the change after a 50 basis point decrease in rates. The duration will rise as yields are lowered, and conversely a high coupon rate or high yield will result in lower durations. While a higher yield reduces the present value of all the bond's payments, it reduces the value of payments further in the future by a greater proportional amount. This amounts to a reduction in duration. Merck & Company's bond has the highest yield and therefore one would surmise that the duration for MRK should be lower than the other bonds, this is only true if all other variables are held equal (ceteris paribus). This is not the case. The bonds have wildly different coupons remaining. Eli Lilly's bond has a similar number of coupons remaining-suggesting a relatively good candidate for comparison-and a lower yield than MRK, leading one to expect LLY bond to have a higher duration than MRK. An astute financial student would discourage this comparison, citing that LLY exhibits the highest (7.125%) annual coupon rate, which would in turn reduce the duration. While comparisons between bonds will fail us due to their unique characteristics, it is easy to see the change when examining a single bond and the effect of a 50 basis point decrease in rates has on the bond's duration. Every single bond's duration rose, relative to itself before the basis change, as their yields were lowered. This helps prove our assumption of the inverse relationship between yield and duration.


What are the demand shifters?

Demand shifters include consumer income, number of consumer (population), consumer taste and preferences, and expectations: future prices of complements and substitutes and future income.


How would the lowering of interest rates by a government affect house prices?

More individuals enter into the housing market when the lowering of interest rates occur. Governments can affect housing prices by lowing the interest rate, less amounts to repay and a higher number of potential buyers, especially the first time purchasers.

Related questions

How do you calculate monthly installment payments with Microsoft Excel?

If you have a set number of payments and a constant interest rate, use the PMT function.PMT(rate,nper,pv,fv,type)Rate = Interest rate for the loanNper = Total number of payments for the loanPv = Present Value (total amount a series of future payments is worth now). Also known as PrincipalFv = [optional] Future Value (cash balance after the last payment). If you omit Fv, it is assumed to be 0 (zero). (e.g., The loan is paid off.)Type = [optional] Indicates when payments are due0 or omitted = End of the period1 = Beginning of the period


What are the two arguments of PMT in Excel?

PMT has the following structure: PMT( rate, nper, pv, fv, type ) Rate is the interest rate for the loan. Nper is the total number of payments for the loan. Pv is the present value, or the total amount that a series of future payments is worth now; also known as the principal. Fv is the future value, or a cash balance you want to attain after the last payment is made. If fv is omitted, it is assumed to be 0 (zero), that is, the future value of a loan is 0. Type is the number 0 (zero) or 1 and indicates when payments are due.


What is the full form of PPMT in Excel?

It is the Principal Payment function. It returns the payment on the principal for a given period for an investment based on periodic, constant payments and a constant interest rate. PPMT( rate, per, nper, pv, fv, type ) Rate is the interest rate per period. Per specifies the period and must be in the range 1 to nper. Nper is the total number of payment periods in an annuity. Pv is the present value- the total amount that a series of future payments is worth now. Fv is the future value, or a cash balance you want to attain after the last payment is made. If fv is omitted, it is assumed to be 0 (zero), that is, the future value of a loan is 0. Type is the number 0 or 1 and indicates when payments are due.


When a series of equal periodic payments is put into an interest bearing account for a specific number of periods?

Annuity


How is accrued interest calculated?

Accrued interest is usually calculated like this: Accrued interest = face value of the bonds x coupon rate x factor. Coupon = Annual interest rate/Number of payments. Factor = time coupon is held after last payment/time between coupon payments.


What is the noun form of duration?

The word 'duration' is a noun, a common, singular, abstract noun; a word for a period of existence or persistence; the number of years required to receive the present value of future payments, both of interest and principle, of a bond.


Does the future value of an investment increases as the number of years of compounding at a positive rate of interest declines?

No, the future value of an investment does not increase as the number of years of compounding at a positive rate of interest declines. The future value is directly proportional to the number of compounding periods, so as the number of years of compounding decreases, the future value of the investment will also decrease.


How are interest on a bond calculated?

Know the bond's face value, then, find the bond's coupon interest rate at the time the bond was issued or bought, then, multiply the bond's face value by the coupon interest rate it had when issued, then, know when your bond's interest payments are made, finally, multiply the product of the bond's face value and interest rate by the number of months in between payments.


How do you calculate total amount of installment?

You need to start with total amount owed, total monthly payments, and annual interest.FORMULA:Payment = (Loan amount x Interest) ÷ (Payments per Year x (1 - (1 + (Interest) ÷ Payments per Year)) raised to the power of negative Payments per Year x Length of Loan)))Or, you could just use Excel and use the PMT function:PMT(interest_rate,number_payments,PV,FV,Type)interest_rate = interest rate for the loannumber_payments = number of payments for the loanPV = present value or principal of the loanFV (optional) = future value or the loan amount outstanding after all payments have been made. If this parameter is omitted, the PMT function assumes a FV value of 0.Type (optional) = when the payments are due. Type can be one of the following values:- 0 = payments due at end of period (default)- 1 = payments due at beginning of period


How do I calculate the payment amount needed to arrive at a known value if I know these variables Present value Future value Rate and that the payment will increase by a known percent each period?

You might be able to use the PMT function. It returns the payment amount for a loan based on an interest rate and a constant payment schedule. You can try different numbers of payments to see what different monthly payments are required.Syntax: PMT(interest_rate,number_payments,PV,FV,Type)interest_rate = interest ratenumber_payments = number of paymentsPV = present value (or principal)FV (optional) = future value (if omitted, the assumed value is 0)Type (optional) = indicates when the payments are due0 = payments due at end of period (default or if not included)1 = payments due at beginning of period


Should you make extra interest payments on a mortgage?

You don't make extra interest payments on a mortgage, you pay additional to lower your principal, which in turn lowers your interest cost. If you can afford it and don't have higher interest rate debt, then definitely yes. As an example, a 300,000 mortgage at 5% for 30 years, paying just $200 extra per month reduces the number of monthly payments by 78, or 6.50 years, and reduces the interest and total paid by $69,210.39. A significant cost savings to you.


What is amortization schedule?

a display of the number of payments and the amount of interest that will be paid. If you are interested in what an amortization schedule is, there are many information websites to help you. However, to answer you question, it is a calculator used to calculate loan payments and how much goes towards the interest and how much goes towards the principal.