Orlando invests 1,000 in a wealth fund for 10 years. (i) During the first 2 years, the wealth fund pays simple interest at an annual rate of 8%. (ii) During the next 5 years, the wealth fund pays an interest rate equiv- alent to a rate of discount of 6% convertible semiannually. (iii) During the last 3 years of Orlando's investment, the wealth fund pays a force of interest of 7%. Calculate the amount Orlando has in the fund at the end of 10 years.
Orlando invests 1,000 in a wealth fund for 10 years. (i) During the first 2 years, the wealth fund pays simple interest at an annual rate of 8%. (ii) During the next 5 years, the wealth fund pays an interest rate equiv- alent to a rate of discount of 6% convertible semiannually. (iii) During the last 3 years of Orlando's investment, the wealth fund pays a force of interest of 7%. Calculate the amount Orlando has in the fund at the end of 10 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
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Transcribed Image Text:Orlando invests 1,000 in a wealth fund for
10 years.
(i) During the first 2 years, the wealth fund
pays simple interest at an annual rate of
8%.
(ii) During the next 5 years, the wealth
fund pays an interest rate equiv- alent
to a rate of discount of 6% convertible
semiannually.
(iii) During the last 3 years of Orlando's
investment, the wealth fund pays a force
of interest of 7%.
Calculate the amount Orlando has in the
fund at the end of 10 years.
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