Question 1

Preview File Edit View Go Tools Window Help 94% -ml us. Sun 11:23 PM a MATH2511 P3.odf (oade 3 of 8 MATH2511 2018Fal Hw2.pdt (page 1 of 3 Q Search before sending to us. Please also include your name and student ID in your file.) Note: Since the class size is large, please submit your work using the first two methods to reduce our workload.) (This assignment is related to the materials covered in Topic 2 and first part of Topic 3) Problem 1 (Required, 20 marks) The information of three annuities is given as follows: n Shot 17.4G AM 1 Annuity 1: It is an annuity-immediate which pays 200 at the end of each month for 3n months. The first payment is made 1 month after today. Annuity 2: It is an annuity-immediate which pays 400 at the end of each month for 2n months. The first payment is made (n1) month after today. .Annuity 3: It is an annuity-immediate which pays 250 at the end of each month during the first n months and pays 500 at the end of each month during the next n months. The first payment is made 1 month after today The money grows at a constant monthly effective interest rate i, whrei >0. It is given that the present values of annuity 1 and annuity 2 are 9201.64 and 11597.769 respectively. Find the present value of the annuity 3. Problem 2 (Required, 20 marks) are given that 8.22 AM We consider a perpetuity-immediate which pays some amount at the end of each month. You The amount of kth payment is max(250(1.005)*,400) The first payment is made at the end of 7th month. Shot 4.34 PM It is given that the annual nominal interest rate is 8.5% compounded continuously. Find the Preview File Edit View Go Tools Window Help 94% -ml us. Sun 11:23 PM a MATH2511 P3.odf (oade 3 of 8 MATH2511 2018Fal Hw2.pdt (page 1 of 3 Q Search before sending to us. Please also include your name and student ID in your file.) Note: Since the class size is large, please submit your work using the first two methods to reduce our workload.) (This assignment is related to the materials covered in Topic 2 and first part of Topic 3) Problem 1 (Required, 20 marks) The information of three annuities is given as follows: n Shot 17.4G AM 1 Annuity 1: It is an annuity-immediate which pays 200 at the end of each month for 3n months. The first payment is made 1 month after today. Annuity 2: It is an annuity-immediate which pays 400 at the end of each month for 2n months. The first payment is made (n1) month after today. .Annuity 3: It is an annuity-immediate which pays 250 at the end of each month during the first n months and pays 500 at the end of each month during the next n months. The first payment is made 1 month after today The money grows at a constant monthly effective interest rate i, whrei >0. It is given that the present values of annuity 1 and annuity 2 are 9201.64 and 11597.769 respectively. Find the present value of the annuity 3. Problem 2 (Required, 20 marks) are given that 8.22 AM We consider a perpetuity-immediate which pays some amount at the end of each month. You The amount of kth payment is max(250(1.005)*,400) The first payment is made at the end of 7th month. Shot 4.34 PM It is given that the annual nominal interest rate is 8.5% compounded continuously. Find the