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Question 4.11 (i) David can receive one of the following two payment streams: 100 at time 0, 200 at time n years, and 300 at time 2n years 600 at time n years The present values of the two payment streams are equal. You are given that the annual force of interest is 12.21%. Calculate n. A 8.0 B 8.5 C 9.0 After 5 years, the value in each account is the same. Calculate 8. A 2.56% B 2.59% Question 4.14 Suzie deposits $200 into an account that earns an annual simple interest rate of 5%. At the same time, John deposits $220 into an account that earns a constant force of interest of 8. D 9.5 C 2.65% E 10.0 D 2.73% E 2.97%

Question 4.11 (i) David can receive one of the following two payment streams: 100 at time 0, 200 at time n years, and 300 at time 2n years 600 at time n years The present values of the two payment streams are equal. You are given that the annual force of interest is 12.21%. Calculate n. A 8.0 B 8.5 C 9.0 After 5 years, the value in each account is the same. Calculate 8. A 2.56% B 2.59% Question 4.14 Suzie deposits $200 into an account that earns an annual simple interest rate of 5%. At the same time, John deposits $220 into an account that earns a constant force of interest of 8. D 9.5 C 2.65% E 10.0 D 2.73% E 2.97%

EBK CFIN
EBK CFIN
6th Edition
ISBN:9781337671743
Author:BESLEY
Publisher:BESLEY
Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 12PROB
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Question 4.11 David can receive one of the following two payment streams: (i) 100 at time 0, 200 at time n years, and 300 at time 2n years 600 at time n years The present values of the two payment streams are equal. You are given that the annual force of interest is 12.21%. Calculate n. A 8.0 B 8.5 C 9.0 After 5 years, the value in each account is the same. Calculate 8. A 2.56% B 2.59% Question 4.14 Suzie deposits $200 into an account that earns an annual simple interest rate of 5%. At the same time, John deposits $220 into an account that earns a constant force of interest of 8. D 9.5 C 2.65% E 10.0 D 2.73% E 2.97%
Transcribed Image Text:Question 4.11 David can receive one of the following two payment streams: (i) 100 at time 0, 200 at time n years, and 300 at time 2n years 600 at time n years The present values of the two payment streams are equal. You are given that the annual force of interest is 12.21%. Calculate n. A 8.0 B 8.5 C 9.0 After 5 years, the value in each account is the same. Calculate 8. A 2.56% B 2.59% Question 4.14 Suzie deposits $200 into an account that earns an annual simple interest rate of 5%. At the same time, John deposits $220 into an account that earns a constant force of interest of 8. D 9.5 C 2.65% E 10.0 D 2.73% E 2.97%
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