Question
A bank credits interest on deposit using accumulation factors based on a variable force of interest. On 1 July 2026, a customer deposited 846 with
A bank credits interest on deposit using accumulation factors based on a variable force of interest. On 1 July 2026, a customer deposited £846 with the bank. On 1 July 2028, his deposit has grown to £1,099.
Assuming that the force of interest per annum is a + b t (on 1 July 2026 we fix t = 0, unit = year) during the period, find the force of interest per annum on 1 July 2027 (in % p.a.).
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given 2026 balance is 846 and 2028 b...
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Financial management theory and practice
Authors: Eugene F. Brigham and Michael C. Ehrhardt
12th Edition
978-0030243998, 30243998, 324422695, 978-0324422696
