4. Samantha deposits 10,000 into a fund at time t = 0. In year 1, the fund accumulates according to a force of interest of 8%. In year 2, the fund accumulates according to a force of interest 3t2 8 (t) = 1+ t3 In year 3, the fund accumulates according to a nominal interest rate of 7% convertible monthly. In year 4, the fund accumulates according to a force of interest 0.05 8 (t) = 1+0.05t Find the equivalent annual effective interest rate over the entire four year period.

4. Samantha deposits 10,000 into a fund at time t = 0. In year 1, the fund accumulates according to a force of interest of 8%. In year 2, the fund accumulates according to a force of interest 3t2 8 (t) = 1+ t3 In year 3, the fund accumulates according to a nominal interest rate of 7% convertible monthly. In year 4, the fund accumulates according to a force of interest 0.05 8 (t) = 1+0.05t Find the equivalent annual effective interest rate over the entire four year period.

Advanced Engineering Mathematics

10th Edition

ISBN:9780470458365

Author:Erwin Kreyszig

Publisher:Erwin Kreyszig

Chapter2: Second-order Linear Odes

Section: Chapter Questions

Problem 1RQ

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Concept explainers

Differential Equations

Have you ever observed the movement of the satellites and rockets or how the planets go around the sun in their orbits? How will you determine their motion? Definitely they follow some scientific laws and these kinds of problems are framed as differential equations.

Question

4. Samantha deposits 10,000 into a fund at time t = 0. In year 1, the
fund accumulates according to a force of interest of 8%. In year 2, the fund
accumulates according to a force of interest
3t2
8 (t) :
1+ t3
In year 3, the fund accumulates according to a nominal interest rate of 7%
convertible monthly. In year 4, the fund accumulates according to a force of
interest
0.05
8 (t) =
1+ 0.05t
Find the equivalent annual effective interest rate over the entire four year
period.

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