Question

Semi-annual payment of 12,000.00 for twelve (12) years that will start from now. What is the period of deferral?

Answer 1

Solution:

$\begin{aligned} &\text { Semi-Annual Payments }=\mathrm{P} 12,000 \\ &\text { Time Period for which Payment is made }=12 \text { Years } \\ &\text { Payment start made after } n\text {(missing in question)} \text { Years from now } \\ &\text { Number of semi-annual periods in a year }=2 \\ &\text { Number of deferral periods }=\text { Number of Semi Annual Periods } \times \text { Time Period after which payment starts(t) - } 1 \\ &\Rightarrow\text { Number of deferral periods }=2 \times n-1 \\ &\Rightarrow\text { Number of deferral periods }=2n-1 \\ \end{aligned}$