Timing and the meaning of a percentage
A training model starts with CHF 100,000 of capital. A CHF 5,000 contribution is made at the end of the year, and the exercise credits two percent interest only on the opening balance. Another worksheet treats the contribution as if it had been present at the start. A learner then uses that interest percentage as a pension conversion factor without noticing that the two rates have different functions. A third worksheet lowers a discount assumption while holding a future payment unchanged and labels the resulting liability increase as a cash loss. None of the supplied rates is asserted to be a current statutory Swiss parameter. The task is to apply the stated convention and explain which conclusions require a different calculation.
1. Calculate the stated closing capital and explain the alternative.
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The stated convention gives 2,000 interest on 100,000 plus the 5,000 year-end contribution, totaling 107,000. If both amounts were present for the full year, the base would be 105,000 and the result 107,100. Timing explains the difference; the alternative is not the supplied convention.
2. Correct the rate and valuation interpretations.
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Interest crediting, pension conversion and discounting have different roles and bases. Do not substitute one percentage into another formula without authority. A lower discount rate increases the present value of the unchanged future payment, but that liability valuation change is not itself a bank cash outflow.