Seoighe,

Let me try and edge you towards the answer. The answer assumes a familiarity with basic financial products. Also there is a slight typo: it should say a payment.

For the sake of understanding, let latex 1+i=1.05$ i.e. 5% interest and a payment of per year

(a): This financial product has orbit:

,

so every year the balance is increased by 5%. This is just a deposit account (The in standing for deposit).

(b): We did this in class, can you find it?

(c): What might stand for? It might make more sense here for and . Here every year the balance is increased by 5% but decreased by €10K. Any ideas?

Regards,

J.P.

Can you explain q2 on the exercise sheet? I’m not sure how to approach it.. Thanks! ]]>