Question

If $12,000 is borrowed at 7.8% interest to be paid back over five years, the third year’s interest payment is $775.82 and principal amount of the same year is $2,386.52. True / False

6. Investments in infrastructure assets that are to be constructed are referred to as greenfield investments. In general, investing in greenfield investments provides stable cash flows and relatively high yields, but offers little potential for growth. True / False

7. If the discount (or interest) rate is positive, the present value of an expected series of payments will always exceed the future value of the same series. True / False

8. Nominal interest rate will be equal to or greater than effective annual rate if compounding occurs more than once a year. True / False

Answer 1