ACTSC231 Study Guide - Quiz Guide: Effective Interest Rate, Interest

• School: University of Waterloo
• Department: Actuarial Science
• Course: ACTSC231
• Professor: Chengguo Weng

Document Summary

Actsc 231 - tutorial 1: [6. 382978736%] given the amount function a(t) = 400(0. 94) t, nd the effective rate of interest in the 6th year. A(5: [10. 51709180%] given the amount function a(t) = 400e0. 1t, nd the effective rate of in- terest in the 4th year. A(3: [15. 49295775%] suppose the accumulation function is quadratic, a(t) = t2 + 0. 08t + . ), and that the annual effective rate in the rst year is 10%. Calculate the annual (t 0. 04 effective rate in the 4th year. Notes: use the fact that a(0) = 1 to nd . Use also the fact that i1 = 10% to nd . Then i4 = a(4) a(3) a(3: [3. 094096462 years] katherine deposits today into an account earning a simple in- terest rate of 10%. Elena will deposit into an account n years from today. Elena"s account grows at an effective annual rate of 8%1.