Unformatted text preview: Name: A Nfgggg'Q K (EV UNIVERSITY OF ILLINOIS AT URBANACHAMPAIGN
Actuarial Science Program
DEPARTMENT OF MATHEMATICS Math 210 Prof. Rick Gorvett
Theory of Interest Fall, 2010 InClass Assignment # 1 (2 problems worth 1 point each)
Thursday, August 26, 2010 This assignment is openbook, open—note, and you may work together in groups of no more than
4. However, each student must hand in her/his own answer sheet. Please show the essential
components of your work, and give answers to two decimal places (e.g., $x,xxx.xx and xx.xx%). 1) Let 151(1) =1.10‘, where ris measured in years. On January 1, 2011, you invest $1,000 (thus,
A(0) 2 1,000). What is the value of your investment on December 31, 2012? (Use a time period measured in years — i.e., use an integer value of 2‘ ; don’t worry about the fact that the
total time period for the investment is one day short oft years.) [1(2) =' Loco " 4(2) 2) An investment of $200 accumulates to $224 one year later. Find the implied annual effective
rate of interest 1'. " '
1‘“ °) A f 0 AC l: 2.24 = 2°°(°~(')l :3 22.4 1' 2—90 ('+L) =75: <::,)..; = 0.12. “L [27. ...
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 Fall '10
 RickGorvett
 Math

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