# An investor receives $1,100 in one year in return for an investment of $1,000 now. Calculate the...

## Question:

An investor receives $1,100 in one year in return for an investment of $1,000 now.

Calculate the percentage return per annum with:

a) Annual compounding

b) Semiannual compounding

c) Monthly compounding

d) Continuous compounding.

## Time value of money:

Time Value of Money is the concept in finance that explains the relationship between present value and future value of any cash flow. The time value of money uses two important variable which are the interest rate and the time period of the investment.

## Answer and Explanation: 1

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View this answer- {eq}Future \ Value = Present \ Value * (1 + r )^ {n} {/eq}

**Calculate the percentage return per annum with:**

**a) Annual compounding**

- {eq}1,100 =1,000 *...

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Chapter 11 / Lesson 2Study the time value of money formula. Learn the time value of money definition and practice how to calculate time value of money to understand the relation to purchasing power.

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