1000 dollars is deposited into an account at the beginning of the year and the value at the end of five years is 1276.30. (a) If the account was subject to a force of interest δ(t) = kt where t is in years, k =? (b) If inflation is 1 percent a year, what is the adjusted effective yearly interest rate?
1000 dollars is deposited into an account at the beginning of the year and the value at the end of five years is 1276.30. (a) If the account was subject to a force of interest δ(t) = kt where t is in years, k =? (b) If inflation is 1 percent a year, what is the adjusted effective yearly interest rate?
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 31P
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1000 dollars is deposited into an account at the beginning of the year and the value at the end of five years is 1276.30.
(a) If the account was subject to a force of interest δ(t) = kt where t is in years, k =?
(b) If inflation is 1 percent a year, what is the adjusted effective yearly interest rate?
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