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Unformatted text preview: O O O O O O (6) (6) (3) (3) O O (1) (1) O O (5) (5) (2) (2) O O O O (4) (4) 1)You receive an award that pays $1,000 at the beginning of year 0, $P at the beginning of year 1, and $3,000 at the beginning of year 2. Find P, given that at the beginning of year 0, the present value of the award at 5% interest per year was $9300. 9300=1000+(1+i)^(1)*P+(1+i)^(2)*3000 i d .05; Ans d solve 9300 = 1000 C 1 C i ^ K 1 * P C 1 C i ^ K 2 * 3000, P i := 0.05 Ans := 5857.857142 2)I invest $P at the end of the year for 30 years at 4% interest compounded annually. Find P, given that the total the present value of all of the deposits is $7781.41. i d .04; j d 1 C i ; n d 30 i := 0.04 j := 1.04 n := 30 Ans d solve 7781.41 = j n K 1 i $ P $ j K n , P Ans := 449.9997117 3)Huntington Bank offers an account that pays 5%, compounded monthly. They decide to change to daily compounding. What interest rate should they offer to obtain the same annual effective rate as the original account? State your answer as a nominal annual ratei.e. i% per year, compounded daily.original account?...
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This note was uploaded on 10/28/2010 for the course MA 170 taught by Professor Staff during the Fall '08 term at Purdue.
 Fall '08
 Staff

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