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So, I need a little help with force of interest.?
I thought I got it but ...
here is the problem
A savings account uses the simple interest method for accrual of interest with an annual interest
rate of i. In its eleventh year the fund earns an annual effective interest rate of 2.3%. Find the force of
interest at the end of 1.5 year
This question just seems like it needs more to me. If I could even just get some advice, I do not necessarily need the answer.
1 Answer
- Vic TimLv 41 decade agoFavorite Answer
Force of interest is a measurement of the intensity of the interest at a aprticular point in time.
Your accumulation function will be a simple linear function because of simple inrterest
a(t) = 1 + .023t
Force of interst is defined as a' (t)/a (t)
a' (t) = .023, assuming your interst rate doesn't change throughout 11 years. Your question implies there is cvarying interst and therefore, there is not enough information to complete this question.
I think...... hope this helps
