Quiz 2 P - & 19& 1 = 1 234 6 d e 195 = 1 215 3 From...

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ACTSC 231 Solutions for Quiz 2 Pink 1. Invest $1 from time 3 to time 4: 1 e R 4 3 t dt = e R 4 3 : 02 1+ : 01 t dt = e 2 ln(1+ : 01 t ) j 4 3 = e ln ( 1 : 04 1 : 03 ) 2 = 1 : 04 1 : 03 ± 2 this is the bal. at the end of the 4th year Interest earned during the 4th year: i 4 = 1 : 04 1 : 03 ± 2 1 = 1 : 95% 2. The 1 year accumulation factors are: a. 1 + i = 1 : 21 b. ² 1 d (2) 2 ³ 2 = 1 : 20 2 ± 2 = 1 : 234 6 c. (1 d ) 1 = (1
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Unformatted text preview: & : 19) & 1 = 1 : 234 6 d. e : 195 = 1 : 215 3 From the borrows persective the larger accumulation factors are preferred. i = 21% is the worest & = 19 : 5 is in the middle d (2) = 20% and d = 19% are equivalent and are the best 1...
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