Question

2. Donny invests $100 at the end of each year for 5 years into an account paying simple interest of i% per year. The value of his investment at the end of the 5th year is $591. Calculatei 3. Given an amount function A(t)-212 +31+4·12 0, t in years, find the following: (a) The effective rate of interest in year 2 (b) The effective rate of discount in the 4th year (c) The corresponding accumulation function. (d) In the amount of interest in the nth year.

Answer 1

2)

amount invested per year = 100

value of investment at the end of 5 years = 591

value of investment at the end of 5 years = 100(1+4i)+ [100*(1+3i)] + [100*(1+2i)] + [100*(1+i)]+100

100(1+4i)+ [100*(1+3i)] + [100*(1+2i)] + [100*(1+i)]+100 = 591

solving the above equation for I will give you the value of the interest rate

which is shown in the images attached below