Q1) (10 marks)

a) Define the accumulation amount and accumulation factor for a loan/investment.

Give the formula for the accumulation factor for simple interest with annual rate r.

b) Explain the difference between the daycount conventions ACT/360 and ACT/365.

Carmen invests $55000 on January 11, 2015 at an annual simple interest rate of 9.00%. Use the daycount convention ACT/365.

c) How much interest does Carmens account make in 1 day? (to 5 decimal places)

d) How much money is in her account on March 31, 2015?

e) On what day does her account balance first equal or exceed $56237.50?