Mathematics of Finance Hw Essay

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Mathematics of finance 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…
The bank pays interests once per month. 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: 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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