The present value today of K payable at the end of 4 years from now is 81.87 if the compound model is assumed and the interest is credited at a force of interest of δ.

The present value today of K payable at the end of 6 years from now is 83.53 if the interest is credited at a force of interest of δt = t for t ≥ 0. 100.

Calculate δ and the effective annual discount rate which is equivalent to δ.

Answer rating: 100% (QA)

Answer From the second statement we have Ke Sdt 8353 Hence 62 K 8353e ddt 8353... View the full answer