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MATHEMATICS OF FINANCE QUESTION Units of RM1, are deposited at the beginning of each year for n years into a financial instrument offering an interest rate of i annually. The interests are then re-invested into another financial instruments offering the interest rate of j annually. a. Derive the accumulated function of deposited fund at the end of n years based on i and j above. b. At n = 10, i = 5% and j = 4%, calculate (a). c. If j = i, show that (a) is equal to the future value of annuity-due at interest rate of i.

MATHEMATICS OF FINANCE QUESTION Units of RM1, are deposited at the beginning of each year for n years into a financial instrument offering an interest rate of i annually. The interests are then re-invested into another financial instruments offering the interest rate of j annually. a. Derive the accumulated function of deposited fund at the end of n years based on i and j above. b. At n = 10, i = 5% and j = 4%, calculate (a). c. If j = i, show that (a) is equal to the future value of annuity-due at interest rate of i.

Advanced Engineering Mathematics
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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Mathematics of finance
MATHEMATICS OF FINANCE QUESTION Units of RM1, are deposited at the beginning of each year for n years into a financial instrument offering an interest rate of i annually. The interests are then re-invested into another financial instruments offering the interest rate of j annually. a. Derive the accumulated function of deposited fund at the end of n years based on i and j above. b. At n = 10, i = 5% and j = 4%, calculate (a). c. If j = i, show that (a) is equal to the future value of annuity-due at interest rate of i.
Transcribed Image Text:MATHEMATICS OF FINANCE QUESTION Units of RM1, are deposited at the beginning of each year for n years into a financial instrument offering an interest rate of i annually. The interests are then re-invested into another financial instruments offering the interest rate of j annually. a. Derive the accumulated function of deposited fund at the end of n years based on i and j above. b. At n = 10, i = 5% and j = 4%, calculate (a). c. If j = i, show that (a) is equal to the future value of annuity-due at interest rate of i.
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