Calculate the accumulation at the end of 20 years of an investment of £550 made at time t = 0, if the following apply: (ii) (i) 8% per annum nominal interest rate convertible monthly for the first 15 years, and thereafter 7% per annum effective discount rate. nominal interest rates of 6% per annum convertible three times per year for 8 years, and thereafter 6% per annum convertible every three years. (iii) 9.5% per annum force of interest for the first 10 years, and thereafter a compound interest rate at which a sum of money would increase fourfold in 20 years.
Calculate the accumulation at the end of 20 years of an investment of £550 made at time t = 0, if the following apply: (ii) (i) 8% per annum nominal interest rate convertible monthly for the first 15 years, and thereafter 7% per annum effective discount rate. nominal interest rates of 6% per annum convertible three times per year for 8 years, and thereafter 6% per annum convertible every three years. (iii) 9.5% per annum force of interest for the first 10 years, and thereafter a compound interest rate at which a sum of money would increase fourfold in 20 years.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Using formulas, no tables, correct answers are i) s20 = £2,614.4 and ii) s20 = £1,715.12 and iii) s20 = £2,844.28
Transcribed Image Text:Calculate the accumulation at the end of 20 years of an investment of £550 made at time
t = 0, if the following apply:
(ii)
(i)
8% per annum nominal interest rate convertible monthly for the first 15 years, and
thereafter 7% per annum effective discount rate.
nominal interest rates of 6% per annum convertible three times per year for 8
years, and thereafter 6% per annum convertible every three years.
(iii) 9.5% per annum force of interest for the first 10 years, and thereafter a compound
interest rate at which a sum of money would increase fourfold in 20 years.
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