Hi All, I have a lab due soon, And I was wondering if anyone could give me any help. I don't directly need the answers, of course, I am just wondering how I should go about doing them. The questions are as follows:
Jean-Guy Renoir wanted to leave some money to his grandchildren in his will. He decided that they should each receive the same amount of money whey they each turn 21. When he died, his grandchildren were 19, 16 and 13 respectively. How much will they each receive when they turn 21 if Jean-Guy left a lump sum of 50,000 to be shared among them equally? Assume the interest rate will remain at 7.75% p.a. compounded semi-annually from the time of Jean-Guy’s death until the youngest grandchild turns 21?
3. The Central Bank pays 7.5% compounded semiannually on certain types of deposits. If interest is to be compounded monthly, what nominal rate of interest will maintain the same effective rate of interest?