Question: ( a ) An investment is worth ( 2 0 0 ) after 6 months under the annual interest rate ( 4
a An investment is worth after months under the annual interest rate compounded quarterly. What was the initial investment amount? marks
b An investment of is made into an account paying monthly interest. How long will it take for its value to grow to at least marks
c A hedge fund claims that they can guarantee monthly rate of return. Assuming compounding effect, what will be the equivalent annual rate of return? marks
di How is logarithmic return on an investment calculated?
ii Suppose that the logarithmic return over months on investment subject to continuous compounding is Find the interest rate. marks
e A secondhand car worth is to be paid off in equal payments at the end of each year. If the loan interest rate is compounded annually, calculate the value of the annual payments? marks
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