MA373 F11 Chapter 4 Homework

MA373 F11 Chapter 4 Homework - the 240 th month using: a....

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Chapter 4 1. Calculate the present value of a continuous annuity of 1000 per annum for 8 years at: a. An annual effective interest rate of 4%; b. A constant force of interest of 4%. 2. An annuity pays $100 at the end of each month in the first year, $200 at the end of each month in the second year, and continues to increase until it pays 1000 at the end of each month during the 10 year. Calculate the present value of the annuity at an annual effective interest rate of 6%. 3. A monthly annuity due pays $1 at the beginning of the first month. Each subsequent payment increases by $1. The last payment is made at the beginning of the 240 th month. Calculate the accumulated value of the annuity at the end of
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Unformatted text preview: the 240 th month using: a. An interest rate of 6% compounded monthly; b. An annual effective interest rate of 6%. 4. Calculate the accumulated value at a constant force of interest of 5% of a 20 year continuous annuity which pays at the rate of (t+1)/2 per period at exact moment t. 5. Section 4.5 Problem 2 from the Book 6. Section 4.6 Problem 1 from the Book 7. Section 4.6 Problem 2 from the Book 8. Section 4.6 Problem 4 from the Book 9. Section 4.6 Problem 6 from the Book Answers 1. a. 6866.52 b. 6846.27 2. 45,561.82 3. a. 45,094.57 b. 44,518.37 4. 160.84 5.-9. See the Book...
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This note was uploaded on 02/26/2012 for the course MA 373 taught by Professor Staff during the Fall '08 term at Purdue University-West Lafayette.

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