ACTSC 231Extra Problem Set 21.A dealer is willing to pay $96,000 for a $100,000 170 day US T-bill and she willing to sell thesame T-bill for $96,006.a.What simple rate of discount does the dealer bid at? (use Banker’s rule)b.What is the ask yeild? (annual nominal rate of interest compounded every 170 days)2.Consider a stream of payments, which pays $100 at time one, $200 at time two and $500 at timefive. This stream of payments is to be replaced by a single payment at time three. Find the sizeof this payment ifu03b4tu003d11u002b.01t.3.An investment fund advertises that it will triple your money in 10 years. What rate of interestiue0a24ue0a3is implied ?4.The force of interest isu03b4u003d10%. At what time should a single payment of $2500 be made so asto be equivalent to payment of $1000 in 1.25 years and $1500 in 6.5 years.5.You are given two loans, with each loan to be repaid by a single payment in the future. Eachpayment will include both principal and interest. The first loan is repaid by a $3000 payment atthe end of 4 years. The interest is accrued at 10% per annum compounded semi-annually. The
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