# ct010t05 - UNSW ACTL1001 Actuarial Studies and Commerce...

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

UNSW ACTL1001 Actuarial Studies and Commerce Tutorial Exercises 5 Exercise 1 Determine the continuous compounding p.a. interest rate equiv- alent to: 1. 6% p.a. eﬀective, 2. 6% p.a. (semi-annual compounding), 3. 0.5% per month eﬀective. Comment on any diﬀerences in your answers. Exercise 2 Suppose the continuous compounding rate of interest is 0 . 09 + 0 . 05 t . Find the accumulated value after 5 years (from the time of payment) of: 1. \$ 100 made at time 0. 2. \$ 100 made at time 2. Exercise 3 Consider a one day loan of \$ 100,000,000 made at an interest rate of 10% p.a. (daily compounding) 1. Find the interest payable for this one day loan. 2. Suppose the interest was quoted as 10%p.a. (continuous compound- ing) instead. Calculate the interest payable for the one day loan, and comment on your answer. Exercise 4 Consider a life annuity for an individual aged 40, which pays \$ 1 at the beginning of every year if the policyholder is alive. The total number of payments is limited to a maximum of 10. Find the value of this annuity

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

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

## This note was uploaded on 06/12/2011 for the course ASB 1001,2522, taught by Professor Nicole during the One '09 term at University of New South Wales.

### Page1 / 2

ct010t05 - UNSW ACTL1001 Actuarial Studies and Commerce...

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

View Full Document
Ask a homework question - tutors are online