Final Exam Solutions and Comments,
Problem 7

Link to complete solution below

• Problem 7  was part of a recent homework problem in Lesson 24. Regarding the answer in part (c), note that
  
  
  • the total payment after 1 month is simply  rP_o  and IT IS EASY TO CHECK that this is consistent with the answer in (c) when  N = 1;
    
    
  • the total payment after 2 months is  rP_o + r(1 - r)P_o,  and with a little work this checks with the answer in (c) when  N = 2.
    
    
  Answers should be checked in this way!
  
  Solution, Problem 7  (embedded jpg document).
  
  

Go to Solutions, Problems 1-2.

Go to Solutions, Problems 3-6.

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Last modified Jul 12, 2008 3:31 PM