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4. [10] One thousand dollars is due at the end of 4 years and $ 2000 at the end of 8 years. If the interest
4. [10] One thousand dollars is due at the end of 4 years and $ 2000 at the end of 8 years. If the interest rate is (4) = 4%. (a) [3] Determine an equivalent single amount at the end of 2 years; (b) [3]Determine an equivalent single amount at the end of 8 years; (c) [4] Show that the equivalent single amounts in (a) and (b) are equivalent. 5. [10] An investment fund advertises that it will double your money in 10 years. (a) [5] What rate of interest i(1) is implied? (b) [5] If the rate of interest is actually i(2) = 5%, how long will it take to triple your money? 6. [10] Sally must repay $ 100 in one year, $ 500 at the end of 2 years and $ 600 at the end of 5 years. The loan is being charged at a rate of discount d= 5% (compound). (a) [5] How much was originally borrowed? (b) [5] What is the equivalent interest rate (1)
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