The force of interest dt is given by St = 0.05, 0.005t, 0 < t ...

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The force of interest dt is given by St = 0.05, 0.005t, 0 < t ≤ 10, 10 < t ≤ 20 t> 20 0.003t+0.0001t², a) Calculate the present value of a unit sum of money due at t = 25. b) Calculate the effective rate of interest per unit time from t = 19 to t = 20. c) A continuous payment stream is paid at the rate of e-0.03t per unit time between t = 0 and time t = 5. Calculate the present value of that payment stream. The force of interest dt is given by St = 0.05, 0.005t, 0 < t ≤ 10, 10 < t ≤ 20 t> 20 0.003t+0.0001t², a) Calculate the present value of a unit sum of money due at t = 25. b) Calculate the effective rate of interest per unit time from t = 19 to t = 20. c) A continuous payment stream is paid at the rate of e-0.03t per unit time between t = 0 and time t = 5. Calculate the present value of that payment stream.

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a To calculate the present value of a unit sum of money due at t 25 we need to integrate the force o... View the full answer