Suppose a fund accumulates according to the force of interest 8 (t) = { ct (10-t)...
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Suppose a fund accumulates according to the force of interest 8 (t) = { ct (10-t) 0≤t≤ 10 0.05 t> 10 where c> 0. A deposit in the amount of 5000 is made at the end of two years, and a deposit of 10,000 is made at the end of 10 years. At the end of 20 years, a withdrawal of 100,000 is made to empty out the fund, and then the account is closed. (a) Find c. (b) Find the equivalent annual effective interest rate over the period (2, 10). That is to say if the annual effective interest rate were constant over this time period, what would it have to be? Suppose a fund accumulates according to the force of interest 8 (t) = { ct (10-t) 0≤t≤ 10 0.05 t> 10 where c> 0. A deposit in the amount of 5000 is made at the end of two years, and a deposit of 10,000 is made at the end of 10 years. At the end of 20 years, a withdrawal of 100,000 is made to empty out the fund, and then the account is closed. (a) Find c. (b) Find the equivalent annual effective interest rate over the period (2, 10). That is to say if the annual effective interest rate were constant over this time period, what would it have to be?
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Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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