Chap 7

Question 1

Pthly effective interest rate

Answer 1

(1+I)^1/p -1

Question 2

Pthly effective discount rate and i equivalent

Answer 2

1-(1-d)^1/p = 1 - (1+I)^-1/p

Question 3

Nominal interest convertible pthly

Answer 3

P(1+I) ^1/p -1

Question 4

Converting between nominal and effective

Answer 4

(1 + i(p)/p)^p = 1+i

Question 5

Nominal to effective discount and i equivalent

Answer 5

(1- d(p)/p)^p = 1-d

= I/1+i

Question 6

Nominal discount convertible pthly and i equivalent

Answer 6

P(1-(1-d)^1/p

P(1-(1+I)-1/p

Question 7

Nominal interest to discount

Answer 7

1 + i(p)/p)^p = (1-d(m)/m)^-m