True or False: Homeowners in states like Texas or Florida may have to purchase special insurance based on their home's geographi
2 answers:
You might be interested in
Answer:
Option E (143) is the appropriate solution.
Explanation:
According to the question,
The modified duration will be:
=
=
=
The percentage change in price will be:
=
= (%)
Now,
The EMOD will be:
=
= ($)
Or,
The EMAC will be:
=
= ($)
Hence,
⇒
⇒
Answer:
a.
The money that we will have in account is $51156.41
b.
The money that we will have in account is $318808.31
Explanation:
a.
The deposits made in the account represent an annuity pattern as the deposits made are of a constant amount, are made after equal interval of time and are for a defined time period. Thus, to calculate the value of money that we will have after 19 years, we will use the formula for the future value of annuity.
The formula for the future value of annuity is attached.
FV = 1100 * [ (1+0.091)^19 - 1 / 0.091 ]
FV = $51156.41178
b.
The same formula for the future value of annuity will be used and we will change n from 19 to 38.
FV = 1100 * [ (1+0.091)^38 - 1 / 0.091 ]
FV = $318808.3149
