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3. Suppose you deposit 200 in a bank account for 5 years. You model the annual interest rates Ri (applying from t=i to t=i+1) as
3. Suppose you deposit 200 in a bank account for 5 years. You model the annual interest rates Ri (applying from t=i to t=i+1) as an i.i.d. sequence of random variables such that 1+Ri-LogNormal(0.048,0.0005). The probability that the accumulated value is less than 250 can be expressed as 0(x) for a unique real number x, where O(x) is the c.d.f. of a standard normal distributed random variable. State the value of x to 3 s.f. 3. Suppose you deposit 200 in a bank account for 5 years. You model the annual interest rates Ri (applying from t=i to t=i+1) as an i.i.d. sequence of random variables such that 1+Ri-LogNormal(0.048,0.0005). The probability that the accumulated value is less than 250 can be expressed as 0(x) for a unique real number x, where O(x) is the c.d.f. of a standard normal distributed random variable. State the value of x to 3 s.f
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