hwk1 23 24 Sol
hwk1 23 24 Sol
hwk1 23 24 Sol
P r m
100 0.05 12
What is the interest after 5 months? And after 12 months?
5 12
I 2.10 5.12
What is the interest rate after 12 months?
r_e
5.12%
What is the amount of your capital after 15 months?
X
106.44
(e) How long do you have to wait before your capital doubles? Report the exact time (in years) and then the approximated valu
t_exact t_approx t_appr-t_ex relative error
14.20669908 14.4 0.193300917 1.36%
How many months do you have to wait EXACTLY before your capital is more than double the initial investment [Your answer
months P
171 203.61
2. Would you prefer to invest your money for one year at a nominal interest rate of 7.50% with continuous compounding or at 7
3. The nominal annual rate r with continuous compounding provides the same interest after one year as the one provided by the
r_m m r_e r
0.3 12 0.344888824 29.63%
4. Consider an ideal bank with effective interest rate r = 10% and the cashflow x|t = (0, 10, 30, 20)|(0, 1, 2, 4)
(a) Compute the Present Value P Vx and the Future Value F Vx of x|t.
x 0 10 30 20
t 0 1 2 4
9.090909091 24.79338843 13.66026911
PV_x FV_x
47.54 € 69.61 €
nd then the approximated value obtained according to the “72 rule”. What is the error of the approximation?
nitial investment [Your answer must be an integer number!] ? What is the EXACT amount of your capital on that month?
ontinuous compounding or at 7.99% with half-year compounding? Does your answer change if the investment is for 5 years?
year as the one provided by the nominal annual rate rm = 3% with monthly compounding. What is r?
0)|(0, 1, 2, 4)
r d
0.1 0.909090909
on that month?
Check (using a spreadsheet) that the computations are correct. Then investigate what happens when the annual
C r dt
100 0.04 0.083333333
TWIN
Final Value D V Principal Interest
151,550.13 € 5000 5000 5000 0
500 5516.666667 5500 16.66666667
500 6035.055556 6000 35.05555556
500 6555.172407 6500 55.17240741
500 7077.022982 7000 77.0229821
500 7600.613059 7500 100.6130587
500 8125.948436 8000 125.9484356
500 8653.03493 8500 153.0349304
500 9181.87838 9000 181.8783801
500 9712.484641 9500 212.4846414
500 10244.85959 10000 244.8595902
500 10779.00912 10500 279.0091222
500 11314.93915 11000 314.9391526
500 11852.65562 11500 352.6556164
500 12392.16447 12000 392.1644685
500 12933.47168 12500 433.4716834
500 13476.58326 13000 476.5832556
500 14021.5052 13500 521.5051998
500 14568.24355 14000 568.2435505
500 15116.80436 14500 616.8043623
500 15667.19371 15000 667.1937102
500 16219.41769 15500 719.4176892
500 16773.48241 16000 773.4824149
500 17329.39402 16500 829.3940229
500 17887.15867 17000 887.1586697
500 18446.78253 17500 946.7825319
500 19008.27181 18000 1008.271807
500 19571.63271 18500 1071.632713
500 20136.87149 19000 1136.871489
500 20703.99439 19500 1203.994394
500 21273.00771 20000 1273.007708
500 21843.91773 20500 1343.917734
500 22416.73079 21000 1416.730793
500 22991.45323 21500 1491.453229
500 23568.09141 22000 1568.091407
500 24146.65171 22500 1646.651711
500 24727.14055 23000 1727.14055
500 25309.56435 23500 1809.564352
500 25893.92957 24000 1893.929567
500 26480.24267 24500 1980.242665
500 27068.51014 25000 2068.510141
500 27658.73851 25500 2158.738508
500 28250.9343 26000 2250.934303
500 28845.10408 26500 2345.104084
500 29441.25443 27000 2441.254431
500 30039.39195 27500 2539.391946
500 30639.52325 28000 2639.523252
500 31241.655 28500 2741.654996
500 31845.79385 29000 2845.793846
500 32451.94649 29500 2951.946492
500 33060.11965 30000 3060.119647
500 33670.32005 30500 3170.320046
500 34282.55445 31000 3282.554446
500 34896.82963 31500 3396.829628
500 35513.15239 32000 3513.152393
500 36131.52957 32500 3631.529568
500 36751.968 33000 3751.968
500 37374.47456 33500 3874.47456
500 37999.05614 34000 3999.056142
500 38625.71966 34500 4125.719662
500 39254.47206 35000 4254.472061
500 39885.3203 35500 4385.320301
500 40518.27137 36000 4518.271369
500 41153.33227 36500 4653.332273
500 41790.51005 37000 4790.510048
500 42429.81175 37500 4929.811748
500 43071.24445 38000 5071.244454
500 43714.81527 38500 5214.815269
500 44360.53132 39000 5360.531319
500 45008.39976 39500 5508.399757
500 45658.42776 40000 5658.427756
500 46310.62252 40500 5810.622516
500 46964.99126 41000 5964.991257
500 47621.54123 41500 6121.541228
500 48280.2797 42000 6280.279699
500 48941.21396 42500 6441.213965
500 49604.35134 43000 6604.351344
500 50269.69918 43500 6769.699182
500 50937.26485 44000 6937.264846
500 51607.05573 44500 7107.055729
500 52279.07925 45000 7279.079248
500 52953.34285 45500 7453.342846
500 53629.85399 46000 7629.853988
500 54308.62017 46500 7808.620168
500 54989.6489 47000 7989.648902
500 55672.94773 47500 8172.947732
500 56358.52422 48000 8358.524224
500 57046.38597 48500 8546.385972
500 57736.54059 49000 8736.540592
500 58428.99573 49500 8928.995727
500 59123.75905 50000 9123.759046
500 59820.83824 50500 9320.838243
500 60520.24104 51000 9520.241037
500 61221.97517 51500 9721.975174
500 61926.04842 52000 9926.048424
500 62632.46859 52500 10132.46859
500 63341.24348 53000 10341.24348
500 64052.38096 53500 10552.38096
500 64765.8889 54000 10765.8889
500 65481.77519 54500 10981.77519
500 66200.04778 55000 11200.04778
500 66920.7146 55500 11420.7146
500 67643.78365 56000 11643.78365
500 68369.26293 56500 11869.26293
500 69097.16047 57000 12097.16047
500 69827.48434 57500 12327.48434
500 70560.24262 58000 12560.24262
500 71295.44343 58500 12795.44343
500 72033.09491 59000 13033.09491
500 72773.20523 59500 13273.20523
500 73515.78258 60000 13515.78258
500 74260.83518 60500 13760.83518
500 75008.3713 61000 14008.3713
500 75758.39921 61500 14258.39921
500 76510.9272 62000 14510.9272
500 77265.96363 62500 14765.96363
500 78023.51684 63000 15023.51684
500 78783.59523 63500 15283.59523
500 79546.20721 64000 15546.20721
500 80311.36124 64500 15811.36124
500 81079.06577 65000 16079.06577
500 81849.32933 65500 16349.32933
500 82622.16043 66000 16622.16043
500 83397.56763 66500 16897.56763
500 84175.55952 67000 17175.55952
500 84956.14472 67500 17456.14472
500 85739.33187 68000 17739.33187
500 86525.12964 68500 18025.12964
500 87313.54674 69000 18313.54674
500 88104.59189 69500 18604.59189
500 88898.27387 70000 18898.27387
500 89694.60145 70500 19194.60145
500 90493.58345 71000 19493.58345
500 91295.22873 71500 19795.22873
500 92099.54616 72000 20099.54616
500 92906.54465 72500 20406.54465
500 93716.23313 73000 20716.23313
500 94528.62057 73500 21028.62057
500 95343.71597 74000 21343.71597
500 96161.52836 74500 21661.52836
500 96982.06679 75000 21982.06679
500 97805.34034 75500 22305.34034
500 98631.35814 76000 22631.35814
500 99460.12934 76500 22960.12934
500 100291.6631 77000 23291.6631
500 101125.9686 77500 23625.96865
500 101963.0552 78000 23963.05521
500 102802.9321 78500 24302.93206
500 103645.6085 79000 24645.6085
500 104491.0939 79500 24991.09386
500 105339.3975 80000 25339.39751
500 106190.5288 80500 25690.52883
500 107044.4973 81000 26044.49726
500 107901.3123 81500 26401.31225
500 108760.9833 82000 26760.98329
500 109623.5199 82500 27123.5199
500 110488.9316 83000 27488.93164
500 111357.2281 83500 27857.22808
500 112228.4188 84000 28228.41884
500 113102.5136 84500 28602.51357
500 113979.5219 85000 28979.52194
500 114859.4537 85500 29359.45368
500 115742.3185 86000 29742.31853
500 116628.1263 86500 30128.12626
500 117516.8867 87000 30516.88668
500 118408.6096 87500 30908.60964
500 119303.305 88000 31303.305
500 120200.9827 88500 31700.98268
500 121101.6526 89000 32101.65263
500 122005.3248 89500 32505.3248
500 122912.0092 90000 32912.00922
500 123821.7159 90500 33321.71592
500 124734.455 91000 33734.45497
500 125650.2365 91500 34150.23648
500 126569.0706 92000 34569.07061
500 127490.9675 92500 34990.96751
500 128415.9374 93000 35415.9374
500 129343.9905 93500 35843.99052
500 130275.1372 94000 36275.13716
500 131209.3876 94500 36709.38762
500 132146.7522 95000 37146.75224
Principal Inves Final Value Diff(FV)
95,000.00 € 132,146.75 € 19,403.38 €