Answer to Question #101593 in Financial Math for esther

Question

Hi
May I know how to do the Business rate.
For 2014 were charged at a rate 0f 36000 per annum. For 2005 the rates have increased to 45000 per annum.
In both years, the annual charge is payable in 9 equal monthly instalments, from 1/4/2015
What amount is for 2014 opening and what amount is for 2015 closing.

Answer 1

i=(1+0.36/9)¹-1=(1+0.04)¹-1=1.04-1=0.04 or 4 percent,

i=(1+0.45/9)²-1=(1+0.05)²-1=1.05²-1=1.1025-1=0.1025 or 10.25 percent,

the second option is beneficial.

The interest rates are assumed in the solution.