MATH 325 Chapter Notes - Chapter 1: Nominal Interest Rate, Effective Interest Rate
13 Sep 2016
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Problems ch 1 (1. 1 1. 8: what is the present value of due in 8 years at an effective annual interest rate of 5. 12%, ,250 accumulates to ,237 in 13 years. If his loan has an annual effective rate of discount of 7%, calculate x. 4. tim deposits into a fund today and fifteen years later. Interest is credited at a nominal discount rate d compounded quarterly for the first 10 years, and at a nominal interest rate of 6% compounded semi-annually thereafter. The accumulated balance in the fund at the end of 30 years is. Calculate d: a deposit of x is made into a fund which pays an annual effective interest rate of 6% for 10 years. At the same time, x/2 is deposited into another fund which pays an annual effective rate of discount d for 10 years. The amounts of interest earned over the 10 years are equal for both funds.
