Question

250 is invested at a discount rate of 18%p.a convertible monthly for the first 3 months followed by an interest rate of 20%p.a convertible quarterly for the first 9 months. Calculate the accumulated sum at the end of the year

Answer 1

$pv=fv(\frac{1}{(1+\frac{r}{m})^{nm}})\\ 250=fv(\frac{1}{(1+\frac{0.18}{12})^{3\times12}})\\ 250=fv(\frac{1}{(1.015)^{36}})\\ \frac{250}{0.0.5851}=\frac{0.5851fv}{0.5851}\\ fv=427.28\\ then,\\ 427.28=fv(\frac{1}{(1+\frac{0.2}{12})^{\frac{9}{3}}})\\ \frac{427.28}{0.9362}=\frac{0.9362fv}{0.9362}\\ fv=456.40$