SolnT1092

SolnT1092 - O O O O O O(6(6(3(3 O O(1(1 O O(5(5(2(2 O O O...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

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 rate--i.e. i% per year, compounded daily.original account?...
View Full Document

This note was uploaded on 10/28/2010 for the course MA 170 taught by Professor Staff during the Fall '08 term at Purdue.

Page1 / 3

SolnT1092 - O O O O O O(6(6(3(3 O O(1(1 O O(5(5(2(2 O O O...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online