Actuarial Science 2053 Lecture Notes - Lecture 6: Promissory Note, On Convoys, Discounting
20 Jan 2016
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He is to repay the loan with 2 payments, one at the end of 6 months and the other at the end of the year. The first payment is to be exactly twice as large as the 2nd payment. If r = 10%, determine the size of the payments, using a focal date of (a) now. (b) at the end of 6 months (c) at the end of one year. Solution to 1. 3. 4 next wednesday: rst in-class quiz. Method i declining balance method default method. Under this method, you calculate the outstanding balance of the loan after each payment has been made. A man borrows on june 1, 2014. He pays back on august 17, on november 20 and on february 2, 2015. The idea here is to write out an equation of value, with the final due date as the focal date.
