Revision as of 21:48, 26 November 2023 by Admin (Created page with "'''Solution: D''' There are essentially four possible ways to invest for 6 years. (6=1+1+1+1+1+1=3+1+1+1=3+3=5+1). Just looking at the interest rates tells us that the best investment is 5+1 years. Then (1 + i)<sup>6</sup> = (1 + 0565/4)<sup>20</sup> = (1 + .04/4)<sup>4</sup> so i = .0548 '''References''' {{cite web |url=https://web2.uwindsor.ca/math/hlynka/392oldtests.html |last=Hlynka |first=Myron |website=web2.uwindsor.ca | title = University of Windsor Old Tests 6...")
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Exercise

AAdmin
Nov 26'23

Answer

Solution: D

There are essentially four possible ways to invest for 6 years. (6=1+1+1+1+1+1=3+1+1+1=3+3=5+1). Just looking at the interest rates tells us that the best investment is 5+1 years. Then (1 + i)6 = (1 + 0565/4)20 = (1 + .04/4)4 so i = .0548

References

Hlynka, Myron. "University of Windsor Old Tests 62-392 Theory of Interest". web2.uwindsor.ca. Retrieved November 23, 2023.

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