Question
In engineering economics, compound interest for capital C is calculated as follows: Ct=CO(1+rn)nt, t0,n0, where r is the annual interest rate, n the total
In engineering economics, compound interest for capital C is calculated as follows: Ct=CO(1+rn)nt, t0,n0, where r is the annual interest rate, n the total number of periods (months) within a year and t is the overall length of period (number of years). Consider a businessman who barrows $12500 from a bank with an annual interest rate is 3%, where interests will be calculated every 3 months (n=4). Provide a line plot for the total amount of debt of the businessman at the end of years 1,2, ..., 10 (calculate this for each year and provide a plot).
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Derivatives Markets
Authors: Robert McDonald
3rd Edition
978-9332536746, 9789332536746
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