(question and solution attached). could someone please explain to me the solution of this problem in a different way? Am not sure I understood why a 7 year period is used. Thanks.
Here the rates given 15%,12% and 10% are for per annum. But in a year, on all mondays, tuesdays and fridays -15% pa is used. on all wednesdays and thursdays-12% is used. on all saturdays and sundays-10% is used. We can split a year in 7 parts so that in 3 parts 15% is used, in next 2 parts 12% is used and in remaining 2 parts 10% is used. Then the eq. will be: (1.15)^3/7×(1.12)^2/7×(1.10)^2/7=(1+i) Then solve for i, you will get 12.69%
Thank you very much, this makes a lot more sense. I wasn't sure if "per annum" meant ALL Mondays,Tuesdays and Fridays of a year, etc. thanks a lot, appreciate.
