a) State the meaning of two nominal rates with different frequencies of conversion are equivalent in...

 

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a) State the meaning of two nominal rates with different frequencies of conversion are equivalent in compound interest. (2 marks) b) At what nominal rate (compounded daily) will an investment increase by 50% in 4 years? (4 marks) c) A man stipulates in his will that $200,000 from his estate to be placed in a fund where his 2 children (one daughter and one son) each to receive a certain amount of money when aged 22, where his son received 1.2 times higher than his daughter. When the man dies, his daughter and son aged 18 and 16 respectively. How much would his son receive, if the fund earns an interest at 8% compounded weekly? (Use focal date at present time) (5 marks) d) A debt of $8,000 bears interest at 12% compounded semi-annually to be repaid at the end of each half year by amount of $800. Find: a. The number of full payments needed (4 marks) b. the final payment (if needed) at the time of one period after the last full payment. (Use focal date in present time) (4 marks) a) State the meaning of two nominal rates with different frequencies of conversion are equivalent in compound interest. (2 marks) b) At what nominal rate (compounded daily) will an investment increase by 50% in 4 years? (4 marks) c) A man stipulates in his will that $200,000 from his estate to be placed in a fund where his 2 children (one daughter and one son) each to receive a certain amount of money when aged 22, where his son received 1.2 times higher than his daughter. When the man dies, his daughter and son aged 18 and 16 respectively. How much would his son receive, if the fund earns an interest at 8% compounded weekly? (Use focal date at present time) (5 marks) d) A debt of $8,000 bears interest at 12% compounded semi-annually to be repaid at the end of each half year by amount of $800. Find: a. The number of full payments needed (4 marks) b. the final payment (if needed) at the time of one period after the last full payment. (Use focal date in present time) (4 marks)

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a Two nominal rates with different frequencies of conversion are considered equivalent in compound interest when they yield the same effective interes... View the full answer