MATH 210 HW #1 - UNIVERSITY OF ILLINOIS AT URBANA-CHAMPAIGN...

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UNIVERSITY OF ILLINOIS AT URBANA-CHAMPAIGN Actuarial Science Program DEPARTMENT OF MATHEMATICS Math 210 P r o f . R i c k G o r v e t t Theory of Interest Fall, 2010 Homework Assignment # 1 (max. points = 10) Due at the beginning of class on Thursday, September 2, 2010 You are encouraged to work on these problems in groups of no more than 3 or 4. However, each student must hand in her/his own answer sheet. Please show your work – enough to show that you understand how to do the problem – and circle your final answer. Full credit can only be given if the answer and approach are appropriate. Please give answers to two decimal places – e.g., xx.xx% and $xx,xxx.xx . (1) You invest $10,000 now, at an annual simple interest rate of 10%. What is the effective rate of interest during the 6 th year of your investment? (2) Suppose that the accumulation function for an account is ) 4 1 ( ) ( it t a + = . At time 0, you invest $1,000 in this account. If the value in the account at time 5 is $1,700, what is
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MATH 210 HW #1 - UNIVERSITY OF ILLINOIS AT URBANA-CHAMPAIGN...

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