Mathematics of Finance Hw Essay
1 Prove which of the following options is the most interesting one:
a) To invest 5,000€ in a bank account that offers an annual simple interest rate of 6%, for 10 months
b) To invest 5,000€ in a bank account that offers an annual compound interest rate of 6%, for 10 months
The bank pays interests once per month
a)
b)
So, option b) is the best.
2 Prove which of the following options is the most interesting one:
a) To invest 5,000€ in a bank account that offers an annual simple interest rate of 6%, for 1 year
b) To invest 5,000€ in a bank account that offers an annual compound interest rate of 6%, for 1 year
The bank pays interests once per month
a)
b)
So, option b) is the best.
3 Prove which …show more content…
If we do it with simple interest rate:
If we do it with compound interest rate:
8 Today I’ll invest 5,000€ in a bank account that offers an annual interest rate of 12%. The bank pays interests once per year. How much money will I have in that account in one year?
If we do it with simple interest rate:
If we do it with compound interest rate:
9 How much money should I invest today, in a bank account that offers a monthly interest rate of 1%, in order to get 100,000€ in two years?
Let’s do it with compound interest rate, and monthly basis:
10 How much money should I invest today, in a bank account that offers an annual interest rate of 12% (interests will be paid once per month), in order to get 100,000€ in two years?
Let’s do it with compound interest rate:
11 How much money should I invest today, in a bank account that offers an annual interest rate of 12% (interests will be paid once per year), in order to get 100,000€ in two years?
Let’s do it with compound interest rate:
12 How much money should I invest today, in a bank account that offers an annual interest rate of 12% (interests will be paid once per semester), in order to get 100,000€ in two years?
Let’s do it with compound interest rate:
13 You have been paid with a bank draft with a nominal value of 25,000€ to be paid after 90 days. But you need cash

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