1. The force of interest per annum at time t, measured in years from the present,...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
1. The force of interest per annum at time t, measured in years from the present, is given by at 1+ at² 8(t) = for 0 ≤t≤8. The accumulated value of £20, 000 invested at time t=0 over 8 years' time is £43,266.62. (a) Obtain an expression for u(s, t), the accumulated value at time t of 1 at time s, in terms of a, s and t. [3] (b) Calculate the accumulated value at time t = 8 of payments of £5,000 at time t = 0 and £4,000 at time t = 5. [8] (c) Calculate the accumulated value at time t = 0 of a continuous payment stream paid between t = 2 and t = 7 at rate p(t) = 10,000√at²+1 per annum. [5] [16] 1. The force of interest per annum at time t, measured in years from the present, is given by at 1+ at² 8(t) = for 0 ≤t≤8. The accumulated value of £20, 000 invested at time t=0 over 8 years' time is £43,266.62. (a) Obtain an expression for u(s, t), the accumulated value at time t of 1 at time s, in terms of a, s and t. [3] (b) Calculate the accumulated value at time t = 8 of payments of £5,000 at time t = 0 and £4,000 at time t = 5. [8] (c) Calculate the accumulated value at time t = 0 of a continuous payment stream paid between t = 2 and t = 7 at rate p(t) = 10,000√at²+1 per annum. [5] [16]
Expert Answer:
Answer rating: 100% (QA)
a To find an expression for us t the accumulated value at time t of 1 at time s we can use the formula for compound interest The accumulated value is ... View the full answer
Related Book For
Posted Date:
Students also viewed these finance questions
-
The price elasticity of demand measures how much a. quantity demanded responds to a change in price. b. quantity demanded responds to a change in income. c. price responds to a change in demand. d....
-
The market for DVDs has supply and demand curves given by Ps = 2Qs and Pd = 42 - Qd, respectively. a. How many units will be traded at a price of $35? At a price of $14? Which participants will be...
-
The American supply and demand curves for widgets are illustrated at the top of the shown below. Foreign widget makers will sell any quantity of widgets to Americans at a price of $2 apiece. Suppose...
-
Find the point (a, b) on the graph of y = ex where the value ab is the least.
-
What is a derivative security?
-
How much is net cash from financing activities? a. \(\$ 7,000\) b. \(\$ 25,000\) c. \(\$ 31,600\) d. \(\$ 32,000\)
-
In this chapter, we discussed adjusting entries for deferred revenue, deferred expense, accrued revenue, and accrued expense. In informal groups in class, discuss how each type of adjusting entry...
-
White Products wishes to purchase goods in one month for sale in the next. On March 31, the company has 8,000 portable music players in stock, although sales for the next month (April) are estimated...
-
MBIs common stock was last traded at $38.00 per share. New issue of common stocks will involve flotation costs of 8%. Last year, the company paid a dividend of $2.12 per share, and future dividends...
-
Ewing Natural Gas is a large energy company with headquarters in Dallas, Texas. The company offers a wide variety of energy products and has annual revenues of approximately $50 billion. Because of...
-
Ms. Smith borrowed $1,250 at an 11% stated rate of interest and was to pay back the installment loan in 24 monthly payments. What is her annual rate of interest? 10.56% 11.60%. 18.96% 22.00%
-
It is impossible to motivate, only to demotivate. Discuss.
-
Which of the following is likely to be the most effective audit procedure for verifying dividends earned on investments in publicly traded equity securities? a. Trace deposits of dividend checks to...
-
Indicate whether each account listed below is a(n) asset (A), liability (L), owner's equity (OE), revenue ( \(R\) ), or expense ( \(\mathbf{\text { e }}\) ) account. Salaries Payable Land L. Graham,...
-
List five ways you can customize a QuickBooks Accountant report.
-
The audit firm's valuation specialist would likely be brought in to assist in the audit of fair value measurements at an entity when the following is present: a. The entity is a new audit client. b....
-
On January 1, 2023, GreenScape Co. contracted Blue Builders to construct a new eco-friendly park for $2,000,000. GreenScape made payments for the construction as follows: March 1, $400,000, June 1,...
-
Repeat the previous problem, but close the positions on September 20. Use the spreadsheet to find the profits for the possible stock prices on September 20. Generate a graph and use it to identify...
-
Sketch LTC, LAC, and LMC curves for the production function given in Problem 2. Does this production function have constant, increasing, or decreasing returns to scale?
-
In 2001, X cost $3 and sold 400 units. That same year, a related good Y cost $10 and sold 200 units. In 2002, X still cost $3 but sold only 300 units, while Y rose in price to $12 and sold only 150...
-
What would the supply curve look like for a good that is not scarce? Assuming the good is useful, what would its demand curve look like? Explain why a positive price for a commodity implies that it...
-
Use the data provided in P 2, but assume that the company uses the perpetual inventory system. (Hint: In preparing the solutions required below, it is helpful to determine the balance of inventory...
-
Eighty-nine percent of chemical companies use the LIFO inventory method for the costing of inventories, whereas only 8 percent of computer equipment companies use LIFO.12 Describe the LIFO inventory...
-
Crazy Eddie, Inc., a discount consumer electronics chain, seemed to be missing $52 million in merchandise inventory. It was a shock, the new management was quoted as saying. It was also one of the...
Study smarter with the SolutionInn App