Question

In: Advanced Math

At the end of every year an investor pays £2,000 towards additional voluntary contributions to build...

At the end of every year an investor pays £2,000 towards additional voluntary contributions to build up a private pension fund. The investor intends to retire in 30 years and wants the pension fund to contain at least £100,000 at the date of retirement. What is the annual effective rate at which the contributions should accumulate? (Perform few steps of both the bisection method and the interpolation method with suitable starting values)

Solutions

Expert Solution

we get the value of r using bisection method approximately

(3.3125+3.296875)/2=3.3046875%


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