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Financial Math
SIMS lecturer has 3 options on repayment for a KES 25Mn - 20yr mortgage. He can make payments
monthly, quarterly or half yearly. For an effective annual rate of interest 9% calculate the total interest
that will be paid in each of the 3 options over the 20-year period.
monthly, quarterly or half yearly. For an effective annual rate of interest 9% calculate the total interest
that will be paid in each of the 3 options over the 20-year period.
Financial Math
Mr. Mike has a savings account with first deposit of $1200 and afterwards deposits $56 a week. Compute the value of the account at time t > 0 assuming the bank pays 8% interest compounded without a pause.
Financial Math
The force interest is given by (t)={0.04,0<t</=1 0.05t-0.01,1<t</5 0.24,t>5
What is the accumulated value at anytime (t>0)of investment of 1 at times 0,4 and 6?
What is present value at time, t =0 of a payment stream paid at a rate of p(t)=5t-1 received between t=1 and t=5
Financial Math
Liabilities of RM100 each are due at the ends of periods 1 and 2. There are three securities available to produce asset income to cover these liabilities, as follows:
i) A bond due at the end of a period 1 with coupons at rate 0.01 per period, valued at a periodic yield of 7%.
ii) A bond due at the end of the period 2 with coupon rate 0.02 per period, valued at a periodic yield of 7.5%.
iii) A bond due at the end of period 2 with coupon rate 0.2 per period, valued at a periodic yield of 7.75%.
Determine the cost of the portfolio that exactly-matches asset income to liabilities due using:
a) bonds i) and ii) only.
b) bonds i) and iii) only.
(c) Which combination minimizes the cost of exact-matching portfolios made up of a combination of the three securities?
i) A bond due at the end of a period 1 with coupons at rate 0.01 per period, valued at a periodic yield of 7%.
ii) A bond due at the end of the period 2 with coupon rate 0.02 per period, valued at a periodic yield of 7.5%.
iii) A bond due at the end of period 2 with coupon rate 0.2 per period, valued at a periodic yield of 7.75%.
Determine the cost of the portfolio that exactly-matches asset income to liabilities due using:
a) bonds i) and ii) only.
b) bonds i) and iii) only.
(c) Which combination minimizes the cost of exact-matching portfolios made up of a combination of the three securities?
Financial Math
Starting on 2011, and continuing until 2022, a company will repay a debt with payments of Rs. 250 000 annually. What equal annual deposits in a fund paying 5% annually beginning on 2001, and continuing until 2022, are required to repay the debt?
Financial Math
An investment of Ksh 100,000 in an account accumulated to Ksh 250,000 after 4 years.
a)State the accumulation factor A(0,4)
b)Find the simple annual interest rate which would give the accumulation factor in part (a)
a)State the accumulation factor A(0,4)
b)Find the simple annual interest rate which would give the accumulation factor in part (a)
Financial Math
A company is due to receive a payment Ksh 300,000 from a customer in 3 months time. To smooth it's cash flows, the company would prefer to receive the payment immediately an has agreed to transfer it's entitlement to this payment to a third party (a discount house)in return for an immediate payment calculated using a rate of commercial discount of 16%p.a. How much will the immediate payment made by the discount house be?
Financial Math
The force interest is given by
(t)={0.04,0<t</=1
0.05t-0.01,1<t</5
0.24,t>5
What is the accumulated value at anytime (t>0)of investment of 1 at times 0,4 and 6?
What is present value at time, t =0 of a payment stream paid at a rate of p(t)=5t-1 received between t=1 and t=5
(t)={0.04,0<t</=1
0.05t-0.01,1<t</5
0.24,t>5
What is the accumulated value at anytime (t>0)of investment of 1 at times 0,4 and 6?
What is present value at time, t =0 of a payment stream paid at a rate of p(t)=5t-1 received between t=1 and t=5
Financial Math
A loan is to be repaid by annuity payable annually in arrears.The annuity starts at rate of ksh 300 per annum.The annuity is repaid for 20years and repayment are calculated using a rate of interest of 7%p.a effective calculate
1) The original amount of the loan
2) The capital outstanding immediately after 5th payment had been made
3)The capital and interest components of the 1st payment
1) The original amount of the loan
2) The capital outstanding immediately after 5th payment had been made
3)The capital and interest components of the 1st payment
Financial Math
selbly decided today that he will save R15000 per quarter over the next 4 years.He will make the first deposit into a saving account in three months time and he will make his last deposit at the end of three years from now.how much will Selby have at the end of four years if interest is earned at 8.8% per annum ,compounded quarterly?
