Interest Rate Conventions - Suppose an investment of $1 made today

Interest Rate Conventions

Task 

In this assignment, you will solve problems on Interest Rate Conventions.

Instructions 

1. Answer the following questions (found in the Chapter 1 Slides):
2. Suppose an investment of $1 made today will be worth $1.03 in three months.
   1. 1. If the interest rate ?  is expressed in the Actual/360 convention and the three-month horizon has 91 days in it, what is ? ?
   2.  If the interest rate r is expressed in the continuous-compounding convention and we treat three months as 1/4 years, what is r ?
3. Consider an investment of $1 over a horizon of one month.
   1.  If the interest rate ?  expressed in the Actual/360 convention is 4%  and the one-month horizon has 31 days in it, to what does the invested amount grow to?
   2. If you had to express the same outcome using a continuous-compounding convention, and we treat one month as 1/12 of a year, what is the continuously-compounded rate r ?
4. Consider an investment of $1 over a horizon of one month.
   1. If the interest rate r expressed in the continuously–compounded terms is 4% and we treat the one month horizon as 1/12 of a year, to what does the invested amount grow?
   2. If you had to express the same outcome using an Actual/360 convention and the one month horizon has 31 days in it, what is the rate ? ?
5. Please, upload xls, xlsx file.
6. Please, use the full computing power of Excel.