Answered: Consider that the force of interest, is…

Algebra and Trigonometry (6th Edition)

6th Edition

ISBN:9780134463216

Author:Robert F. Blitzer

Publisher:Robert F. Blitzer

ChapterP: Prerequisites: Fundamental Concepts Of Algebra

Section: Chapter Questions

Problem 1MCCP: In Exercises 1-25, simplify the given expression or perform the indicated operation (and simplify,...

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Question

Consider that the force of interest, is a function of time, measured in years, and is given by the following expression:

0.05 - 0.0010 t for 0 < t < 14

0.09 for t > 14

Hence, find the equivalent constant force of interest per quarter year for the period of t=8 to t=29 years.

No tables, only formulas, please

Expert Solution

Step 1: Method used

To find the equivalent constant force of interest per quarter year for the period from t=8 to t=29 years, you can integrate the given expression for the force of interest with respect to time over this interval and then convert it to a quarterly rate.

First, break the time interval into two parts: 8 to 14 years and 14 to 29 years. Then, calculate the total accumulated interest for each part.