Solutions to Extra Problems 2b

Solutions to Extra Problems 2b - 365 41 times per year i m...

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ACTSC 231 Solutions to Extra Problems 2b 1. a) 1000000 1 : 0384 13 360 ±± = 998 ; 6 13 : 33 b) Sell for: 5000000 1 : 0387 48 360 ±± = 4 ; 974 ; 200 : 00 Buy for: 5000000 1 : 0377 34 360 ±± = 4 ; 982 ; 197 : 20 The net transaction results in the bank paying the dealer: 4 ; 982 ; 197 : 20 4 ; 974 ; 200 : 00 = 7 ; 997 : 20 c) Cost: 10000000 1 : 0378 41 360 ±± = 9 ; 956 ; 950 : 00 Earned interest: 10000000 9956950 = 43 ; 050 : 00 E/ective rate of interest rate per 41 days: i ( m ) m = 43050 9956950 Nominal rate of interest compounded every 41 days or
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Unformatted text preview: 365 41 times per year: i ( m ) = & 365 41 ± 43050 9956950 = 3 : 85% 2. a & 1 ( n ) = e & R n & t dt = e & R n : 06 1 & : 02 t dt = e 3 ln(1 & : 02 t ) j n = e ln(1 & : 02 n ) 3 = (1 & : 02 n ) 3 1. 600 = Xa 4 j = ) X = 600 a 4 j = 600 a & 1 (1)+ a & 1 (2)+ a & 1 (3)+ a & 1 (4) = 600 (1 & : 02) 3 +(1 & : 04) 3 +(1 & : 06) 3 +(1 & : 08) 3 = 174 : 66232 1...
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