Assignment 4 for Financial Mathematics Problems - Fall 2008 | MATH 3615, Assignments of Mathematics

Download Assignment 4 for Financial Mathematics Problems - Fall 2008 | MATH 3615 and more Assignments Mathematics in PDF only on Docsity! University of Connecticut Math 3615: Financial Mathematics Problems Fall 2008 Name Homework Assignment 4 – due Tuesday 9/23/08 Module 5 Problems 1. You are given the following information about an investment account: Date Value Before Dep/Wdl Deposit / (Withdrawal) January 1, 2008 100 X 120 80 January 1, 2009 210 If the time-weighted return for this investment is 1 percentage point (100 basis points) higher than the dollar-weighted return, what is the date (X) of the deposit? (Assume 30-day months. Round your answer to the nearest date.) 2. An investor purchases a 10-year annuity for 7,500. The annuity will pay the investor 500 at the end of the first year, 600 at the end of the second year, 700 at the end of the third year, etc. for a total of 10 payments. The contract will also pay an additional amount, X, at the end of the 10th year (so that the total payment on that date is 1,400+X). If the investor’s internal rate of return on this contract is 7.50%, what is the value of X?