Question

A deposit of 800 is made into a fund at time 0. The fund pays interest at a nominal rate of discount, k compounded semiannually for the first three years.

After that, interest is credited at a force of interest, δt = 1/(t+1)

At the end of five years, the accumulated value of the fund is 1,500. Calculate k.

A. 7.3%

B. 7.6%

C. 7.9%

D. 8.2%

E. 8.5%

Answer 1

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