0
votes
2answers
56 views

Compound interest with a compounding interest rate

I have an investment which pays 3% interest (r) annually but it also increases the interest rate every year by 5% (g). I re-invest all interest payments at the start of each year. How many years (t) ...
0
votes
0answers
27 views

Finding inflation rate

This is my maths problem: A car cost $19,335 in 1989, and it is worth $40,000 in today's money, adjusting for inflation. How much is the inflation rate? What ...
0
votes
0answers
51 views

Finding criteria for a household financial budget falsification

I’m working on a financial problem about budget of households. Households in a state fill a form about their net budget in every year and our insurance company investigate their financial status and ...
1
vote
0answers
53 views

Need help with partial derivatives

So here's the question: The monthly payment $P$ on a mortgage loan of $A$ dollars at an APR of $r$ (as a decimal) for $t$ years is given by this formula. $$P(A,r,t)$= ...
1
vote
2answers
127 views

Compound interest problem

Find the present value and accumulated value after 10 years for an income stream with the rate of money flow $f(t) = 200 + 150t$ dollars per year and the rate of interest 12% compounded continously. ...
2
votes
1answer
7k views

Finding Revenue Function and Max Revenue

Studying for a midterm. The demand function for a manufacture's product is $p=1000-\frac1{80} q$ Where $p$ is the price (in dollars) per unit when $q$ units are demanded (per week) by consumers. ...
0
votes
1answer
33 views

financial calculus put option

Consider a 1-year European put (right to sell) with a strike price of 52 on a stock whose current price is 50. We suppose that there is only time step at which the stock moves either up by 20% or down ...
0
votes
1answer
69 views

financial calculus call option

A stock price is currently 50. It is known that at the end of 2 months it will be either 53 or 48. The risk-free interest rate is 10% per annum with continuous compounding. What is the value of a ...
1
vote
2answers
138 views

Solving i for annuities equation without financial calculator

I would like to know if there was a way to approximate i here without a financial calculator, in the following equation: $\displaystyle -50000 + \frac{12992}{1+i} + \frac{12992}{(1+i)^2} + ⋯ + ...
0
votes
0answers
73 views

Optimal division of money between a loan and a down payment

I'm in the market for a car. I have no credit and was hoping to build some with a loan towards a car. I don't want to develop bad credit, so I plan to take out a loan that I know I can pay off with ...
0
votes
1answer
37 views

Suppose you invest \$10 at 10.2% per annum compounded annually. How many years would it take for your investment to grow to \$15 000?

I'am solving a simlar equation to this and just trying to figure out how they did it? the only part I don't understand is how they got the number.... 1.102 15000 = 10(1.102)n ¬1 mark 1500 = 1.102n
1
vote
1answer
141 views

Continuous annuity calculation

This is a problem from Marcel Finan's Exam FM/2 course. It is not homework but I am studying for the FM exam and trying to get through this. You are given $\frac{d}{dt}\bar{s}_t$ = $(1.02)^{2t}$. ...
1
vote
1answer
335 views

Finding a fix amount payment to payoff multiple credit cards in 24 months

Mr.Debt has 3 credit cards. First card have \$5,000 balance with the rate of 10% compounded monthly. Second card have \$2,000 balance with the rate of 14% compounded monthly. Third card have \$4,000 ...
2
votes
1answer
2k views

Continually Compounded Interest + Addition to Principal

This is essentially the continually compounded version of this question. I want to know how much money I will have after continually compounding interest, plus continually adding a fixed amount to ...
0
votes
2answers
65 views

How is it possible to revise for a maths test of this type - Which is the best method to solve it

I need some help with this question, My answer to question E) is 1880 pounds per year, can anyone suggest a different answer, also does anyone know how would I revise for questions of this type. ...
3
votes
2answers
659 views

Maximizing a function containing an integral

Problem. Let $\rho\colon[-1,\infty)\to\mathbb{R}$ be a function such that $$\int_{-1}^\infty\rho(x)\,dx=1.$$ Let $G\colon[0,1]\to\mathbb{R}$ be a function that is defined with $$G(f) := ...
7
votes
1answer
536 views

The so-called rule of 72 (or rather, 69)

This BBC article discusses the 'rule of 72' - essentially along the lines that questions to do with economic growth and inflation and so forth can be approximated by a simple formula using the number ...
2
votes
1answer
331 views

Derivatives of Brownian motion or Box Options Greeks

Here's the probability (I think) that a particle in Brownian motion (w/ standard deviation $\sqrt{t}$) will exceed $m$ between times $t_1$ and $t_2$: $$\frac1{2\sqrt{2\pi}}\int_{-\infty }^m ...