For an Actuarial Science course

9. Yield Rates (a) A savings plan requires you to deposit $5,000 on 1/1/2020 and $5,000 on 1/1/2021, and pays you $4000 on 1/1/2023, $4000 on 1/1/2024, and $4000 on 1/1/2025. Find the Net Present Value (on 1/1/2020) of this plan assuming 3% effective annual interest. (b) You have an option of loaning $10,000 at an effective annual compound discount rate of 4% on 1/1/2020 with repayment of $10,000 due on 1/1/2025. Find the Net Present Value (on 1/1/2020 and assuming 3% effective annual interest) of this investment