MATH 2FM3 Lecture Notes - Lecture 5: Compound Interest, Actuarial Notation, Asteroid Family
18 Sep 2016
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How long does it take for to grow to ? a- 2650 x= 1750 ii. Rn denotes the nominal rate of interest which is the interest for the whole time period ( n compounding periods) which induces an interest rn. Example : tom has an unpaid balance of on a credit card with an annual nominal charge of unpaid balances of 24% payable monthly. How much does he owe at the end of the year. Example : bank a offers ( on deposits) an annual rate of 15. 25% compounded semi annually and bank b offers an annual rate of. Notation : standard actuarial notations i= effective annual rate in : nominal rate m= number of compounding periods. Example : actuarial notation of previous example (2) in = 15. 25% ian. Question : what is the link between i and its equivalent , icm. 1- if )m i is equivalent to icm" it :
