There are 4 questions each worth 5 points for a total of 20 points for the assignment. 1) In each case find the rate of interest as indicated. a) Find & given i=5.25% b) Find i given 8=2.75% c) Find 8 given if=4.9% d) Find & given d(2=13.5% e) Find 82.75 given 5% simple discount 2) Solve the following problems involving the force of interest. a) $16000 is invested at a force of interest of 8%. Find the accumulated value after 4 years. b) $140,000 is due in 2 years and 8 months. Find the present value today at a 6% force of interest. c) $11200 is invested at time 0 to an account that earns & = 0.03 + 0.016t. Find the accumulated value after six years. d) Geri owes a payment $18000 due in three years. If she can earn at 8, = 0.06 + how much 4(t+1) should she invest today to be able to make the payment? 3) Solve the following problems involving real rates of return and interest. a) Find Areal with 5.5% interest and 2.25% inflation. b) An account pays a 3.75% real interest rate. Find the rate of interest paid during a year when inflation is 1.95%. c) An account pays a 6.2% real rate of return. If $13100 is deposited on January 1, 2018 and the account has an AV of $13,416 on December 31, 2019 find the average annual effective inflation rate of the two years 2018-9. d) Jon has $12500 today. If he invests his money at 6% interest and inflation is 2% per year, when will his purchasing power be twice what it is today? 4) Solve the following equations of value. a) At a force of interest of 5% payments of S16000 in one year and $14000 in two years have the same present value as a payment of X in four years. Find X. b) With a real rate of return of 3.5% and 1.8% inflation how long will it take for $11000 to accumulated to $11500? c) At a simple rate of interest of i payments of $1500 at time 0 and $1400 at time 2.75 will accumulate to $11500 at time 5. Find i. There are 4 questions each worth 5 points for a total of 20 points for the assignment. 1) In each case find the rate of interest as indicated. a) Find & given i=5.25% b) Find i given 8=2.75% c) Find 8 given if=4.9% d) Find & given d(2=13.5% e) Find 82.75 given 5% simple discount 2) Solve the following problems involving the force of interest. a) $16000 is invested at a force of interest of 8%. Find the accumulated value after 4 years. b) $140,000 is due in 2 years and 8 months. Find the present value today at a 6% force of interest. c) $11200 is invested at time 0 to an account that earns & = 0.03 + 0.016t. Find the accumulated value after six years. d) Geri owes a payment $18000 due in three years. If she can earn at 8, = 0.06 + how much 4(t+1) should she invest today to be able to make the payment? 3) Solve the following problems involving real rates of return and interest. a) Find Areal with 5.5% interest and 2.25% inflation. b) An account pays a 3.75% real interest rate. Find the rate of interest paid during a year when inflation is 1.95%. c) An account pays a 6.2% real rate of return. If $13100 is deposited on January 1, 2018 and the account has an AV of $13,416 on December 31, 2019 find the average annual effective inflation rate of the two years 2018-9. d) Jon has $12500 today. If he invests his money at 6% interest and inflation is 2% per year, when will his purchasing power be twice what it is today? 4) Solve the following equations of value. a) At a force of interest of 5% payments of S16000 in one year and $14000 in two years have the same present value as a payment of X in four years. Find X. b) With a real rate of return of 3.5% and 1.8% inflation how long will it take for $11000 to accumulated to $11500? c) At a simple rate of interest of i payments of $1500 at time 0 and $1400 at time 2.75 will accumulate to $11500 at time 5. Find
