ACTSC231 Study Guide - Quiz Guide: Actuarial Science, Effective Interest Rate
21 Jun 2019
School
Department
Course
Professor
Document Summary
Department of statistics and actuarial science, university of waterloo. Notes: show all work, aid: soa approved calculators or faculty of math approved calculators, unless otherwise speci ed, nal answers should be given to 4 decimal places. 1: [3 marks] (mc section) each question has exactly one correct response. Assume a 365-day year and that deposits are made at the end of the month: 25254. 7401, 25823. 8844, 26184. 3113, 24353. 004, 24857. 2276. In this case, we need the equivalent monthly effective interest rate, i which is such that (1 + i)12 = (1 + 0. 1%)365. Therefore, the answer is 150 s60 i = 25254. 7401 = . A). (b) [1 mark] assume an effective interest rate of i and that payments are made at the end of the year. Consider the following payment stream: a payment of each year for the rst n years, and, a payment of each year for years n + 1 to 2n.
