Mathematics For Machine Technology
8th Edition
ISBN: 9781337798310
Author: Peterson, John.
Publisher: Cengage Learning,
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Chapter 84, Problem 48A
To determine
The decimal number
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Drapers' Bank offers loans and deposits with interest rate 5% compounded monthly.
(a)
If you deposit £5,000 in a Drapers' Bank account, how much money will be in your account 4 years from now? Enter your answer correct to the
nearest pound.
Answer:
(b) What is the effective interest rate of a Drapers' Bank account? Enter your answer as a percentage correct to 3 significant digits.
Answer:
(c)
Drapers' Bank gives you a loan of £60,000 to start a new company under the condition that you pay back the loan in monthly instalments of EC to
be paid at the end of each month over the next 5 years, starting at the end of this month. Determine the value of C and enter it correct to the nearest pound.
Answer:
The Mason group has a liability of £200,000 to be paid in 14 years' time. It wants to Redington immunise these liabilities with assets consisting of amount P in
a bank and Q 18-year zero coupon bonds, with P and Q to be determined. Interest is compounded monthly at rate 8%.
(a)
Answer:
What is the present value of the liability? Enter your answer correct to the nearest pound.
(b) What is the duration of the liability? Enter your answer correct to 3 significant digits.
Answer:
(c) What is the convexity of the liability? Enter your answer correct to 3 significant digits.
Answer:
(d)
Write down the two equations that P and Q need to satisfy for Redington immunisation to hold and solve these equations for P and Q. Enter the
answers correct to the nearest pound.
Answers: P=
Q=
(e) What is the convexity of the assets in this case? Enter your answer correct to 3 significant digits.
Answer:
(f)
Is the convexity condition that is necessary for Redington immunisation satisfied in this case?…
Chapter 84 Solutions
Mathematics For Machine Technology
Ch. 84 - Prob. 1ACh. 84 - Prob. 2ACh. 84 - Prob. 3ACh. 84 - Prob. 4ACh. 84 - Prob. 5ACh. 84 - Prob. 6ACh. 84 - Prob. 7ACh. 84 - Prob. 8ACh. 84 - Prob. 9ACh. 84 - Analyze the following numbers. 0.802
Ch. 84 - Prob. 11ACh. 84 - Prob. 12ACh. 84 - Prob. 13ACh. 84 - Prob. 14ACh. 84 - Prob. 15ACh. 84 - Prob. 16ACh. 84 - Prob. 17ACh. 84 - Prob. 18ACh. 84 - Prob. 19ACh. 84 - Prob. 20ACh. 84 - Prob. 21ACh. 84 - Prob. 22ACh. 84 - Prob. 23ACh. 84 - Prob. 24ACh. 84 - Prob. 25ACh. 84 - Prob. 26ACh. 84 - Prob. 27ACh. 84 - Prob. 28ACh. 84 - Prob. 29ACh. 84 - Prob. 30ACh. 84 - Prob. 31ACh. 84 - Prob. 32ACh. 84 - Prob. 33ACh. 84 - Prob. 34ACh. 84 - Prob. 35ACh. 84 - Express the following binary numbers as decimal...Ch. 84 - Prob. 37ACh. 84 - Prob. 38ACh. 84 - Prob. 39ACh. 84 - Prob. 40ACh. 84 - Prob. 41ACh. 84 - Prob. 42ACh. 84 - Prob. 43ACh. 84 - Prob. 44ACh. 84 - Prob. 45ACh. 84 - Prob. 46ACh. 84 - Prob. 47ACh. 84 - Prob. 48ACh. 84 - Prob. 49ACh. 84 - Prob. 50ACh. 84 - Prob. 51ACh. 84 - Prob. 52ACh. 84 - Express the following decimal numbers as binary...Ch. 84 - Prob. 54ACh. 84 - Prob. 55ACh. 84 - Prob. 56ACh. 84 - Express the following decimal numbers as binary...
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