Subject : Models with separation equations

Number 6 only

State the problem clearly,type of DE specified

6 A bank pays an annual rate of interest of 5%, and an annual fixed loyalty bonus of 1/100 of a money unit. Modify the compound interest model accordingly, then compute the value of one money unit after 5 years. Also, find out what interest rate would need to be paid by the bank to generate the same amount at that time if there was no loyalty bonus. 6 A bank pays an annual rate of interest of 5%, and an annual fixed loyalty bonus of 1/100 of a money unit. Modify the compound interest model accordingly, then compute the value of one money unit after 5 years. Also, find out what interest rate would need to be paid by the bank to generate the same amount at that time if there was no loyalty bonus