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Unformatted text preview: interest rate of i .
Taking into account reinvestment, Connor’s annual yield is 9%.
Calculate i .
17. Derek lends 600 to a friend. The loan will be repaid with payments of P at the end of one
year and 300 at the end of 3 years. Derek reinvests the payment of P at an annual effective
interest rate of 8.25%.
Taking into account reinvestment, Derek earns an annual yield of 10% on this loan.
Determine P .
Chapter 2, Section 6
Use the following information for questions 18 – 20.
Time
0
½
1
1½
2 Fund Value Before
Contributions
20,000
21,000
24,000
30,000
29,000 Contributions
0
5000
4000
3000
0 18. Calculate the exact annual dollar weighted return for the fund.
19. Estimate the annual dollar weighted return for this fund assuming simple interest.
20. Estimate the annual dollar weighted return for this fund assuming simple interest and that all
cash flows occurred at the end of the first year. January 24, 2013 21. Zaki has a bank account balance of X on January 1, 2010. During the next two years Zaki
deposits...
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 Fall '08
 Staff
 Math

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