University of Waterloo
ACTSC231 - Mathematics of Finance
Winter 2012
Tutorial #2
1. Complete the following table that summarizes the key relationships for simple accumulation:
Rate
Accumulated value o
1 . ( 6pts.) A rthur b uys $ 2,100 w orth o f s tock. S ix m onths l ater, t he v alue o f t he s tock has r isen t o $ 2,200 a nd A rthur b uys a nother $ 900 w orth o f s tock. A fter a .notherg $ m
University of Waterloo
ACTSC231 - Mathematics of Finance
Winter 2012
Problem Set #1
1. Suppose that the accumulation function of an account is given by a(t) = t2 + 0.1t + , and the
eective interest ra
ACTSC 231 Tutorial 5
Nov 17, 2009 1. A 6% $1000 par-value bond maturing in eight years and having semi-annual coupons has the same price as a 5.5% $1000 par bond, also with semi-annual coupons. Both b
62 Chapter 1 The growth of money
(1.3) Accumulation and amount functions
(1) Given that Axe) = ll? for 0 g: < 100, nd K and a(20).
(2) If you invest $2,000 at time 0 and a(t) = 1 + .04t, how much will
Assignment 3
ACTSC231 (Mathematics of Finance), FALL 2010
This assignment consists of two parts. In the rst part, you need to work out eleven questions that are in the same style as in the previous tw
ACTSC 231 Tutorial 4
Nov 10, 2009 1. It is reported that the present value of an annuity paying $1,000 at the end of each year for Y years is $12,692.58 and the present value of an annuity paying $300
Assignment 2
ACTSC231 (Mathematics of Finance), Winter 2010
Due: February 11 (Friday)
Hand in to the instructor in class
To earn the credit of the assignment, you need to justify your answer. Simply l
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Actsc 231 - Problem Set 6
1. Davina wants to purchase a $25, 000 car today. In order to nance the purchase, she takes
out a loan for the full amount of the car. She is required to pay off the loan in
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Actsc 231 - Problem Set 5.5 Solution
1. Let t = 0 be the time of his 55th birthday (for reference).
Method 1: Use the focal date as t = 10 (the time of his 65th birthday just before the
rst withdrawa
Actsc 231 - Problem Set 5
In this problem set, well focus mainly on annuities. In order to get acquainted with the
notation, you may want to try solving the question using basic geometric progressions
Actsc 231 - Problem Set 4 Solution
This week, most of the following questions are challenging questions. For less difcult
questions, please refer to the course textbook.
1. A new ination-linked produc
Actsc 231 - Problem Set 5.5
This problem set is composed of recommended problems from the course textbook.
1. (Exercise 3.4 Part A Question 12) On Mr. Pimentels 55th birthday, the Pimentels decide
to
Actsc 231 - Problem Set 5 Solution
In this problem set, well focus mainly on annuities. In order to get acquainted with the
notation, you may want to try solving the question using basic geometric pro
Actsc 231 Notes
1
1.1
Chapter 1 - The Time Value of Money
Introduction
Interest can be defined as the compensation one receives for lending an asset. For example,
? if you deposit money in a bank acc