6. The force of interest 8 (t) at time t (measured in years) is given by 0.08 = 0.06 (0.04 for 0

Trigonometry (MindTap Course List)
10th Edition
ISBN:9781337278461
Author:Ron Larson
Publisher:Ron Larson
Chapter6: Topics In Analytic Geometry
Section: Chapter Questions
Problem 33CT
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6.
The force of interest 8(t) at time t (measured in years) is given by
0.08
for 0 <t≤5
for 5 < t ≤ 10
8(t)=0.06
(0.04
for 10 < t.
(a)
Derive expressions for v(t), the present value of 1 due at time t.
Find the present value at t = 0 of RM1000 due at time t = 15.
(b)
(c) Calculate the corresponding effective annual discount rate over the 15 years.
Transcribed Image Text:6. The force of interest 8(t) at time t (measured in years) is given by 0.08 for 0 <t≤5 for 5 < t ≤ 10 8(t)=0.06 (0.04 for 10 < t. (a) Derive expressions for v(t), the present value of 1 due at time t. Find the present value at t = 0 of RM1000 due at time t = 15. (b) (c) Calculate the corresponding effective annual discount rate over the 15 years.
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