ma305_may_2003_exam_solutions_slides (1)

# ma305_may_2003_exam_solutions_slides (1) - 1 COMPOUND...

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Unformatted text preview: 1 COMPOUND INTEREST EXAM PAPER May 2003 i) ii iii) iv) v) vi) ( ) ( ) 15 15 15 15 15 15 (12) (12) 15 15 15 15 15 15 15 (1 ) 1 3.64248 1 32.0033 .082569 (1 ) 1 3.64248 1 30.663 .086178 1 1 .27454 8.4485 .085869 15 (1 ) 56.5358 15 8.41822 i s d i i s s v a d a v Ia i i a v Ia δ δ δ +-- = = = +-- = = = =-- = = = - = + = -- = = && && && && ( ) 15 15 15 .27454 49.8982 .086178 15 77.1033 a Da i × =- = = 12 2 (12) (2) 6 (2) (12) (2) 12 4 (12) (4) 3 (4) (12) (4) 1 1 12 2 1 1 .12304 2 12 1 1 12 4 1 1 .11764 4 12 i i i i i i d d i d-- + = + ⇒ + = + ⇒ = + =- ⇒- = + ⇒ = 2 i) Therefore accumulation of £500 is £534.47 ii) Let i be the annual effective rate of interest, then ( ) 5 2 3 5 2 0.005 0.0001 (0.005 0.0001 ) 2 3 0.0625 0.00416 (0,5) 1.06894 t t t t dt A e e e + + + ∫ = = = = 5 (1 ) 1.06894 0.01342 i i + = ⇒ = { } @1% @3% 40 40 @1% 30 2 1000 (1.01) 1000 70.83311 24.32159 £95,154.70 s Accumulation s s = + = + = Let X...
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ma305_may_2003_exam_solutions_slides (1) - 1 COMPOUND...

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