ACTSC231 ASSIGNMENT 1.
DUE ON MAY 25, BEFORE CLASS
The problems are not in the order of difficulties.
(1) Jane deposits 500 into an account at the beginning of each 4year period for 40
years. The account credits interest at an annual effective interest rate of i. The
accumulated amount in the account at the end of 40 years is X, which is 5 times
the accumulated amount in the account at the end of 20 years. Calculate X.
(2) Eric deposits 100 into a savings account at time 0, which pays interest at a nominal
rate of i, compounded semiannually.
Mike deposits 200 into a different savings
account at time 0, which pays simple interest at an annual rate of i.
Eric and
Mike earn the same amount of interest during the last 6 months of the 8th year.
Calculate i.
(3) An association had a fund balance of 75 on January 1 and 60 on December 31.
At the end of every month during the year, the association deposited 10 from
membership fees.
There were withdrawals of 5 on February 28, 25 on June 30,
80 on October 15, and 35 on October 31. Calculate the dollarweighted (money
weighted) rate of return for the year.
(4) 1000 is deposited into Fund X, which earns an annual effective rate of 6%. At the
end of each year, the interest earned plus an additional 100 is withdrawn from the
fund. At the end of the tenth year, the fund is depleted. The annual withdrawals
of interest and principal are deposited into Fund Y, which earns an annual effective
rate of 9%. Determine the accumulated value of Fund Y at the end of year 10.
(5) A 20year loan of 1000 is repaid with payments at the end of each year. Each of
the first ten payments equals 150% of the amount of interest due.
Each of the
last ten payments is X. The lender charges interest at an annual effective rate of
10Calculate X.
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 Spring '09
 Chisholm
 Time Value Of Money, Net Present Value, annual effective rate, Lori

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