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A savings plan provides that in return for n annual premiums of X$, an investor will receive m annual payments of Y$ , the first such payments being made one period after payment of the last premium. Show that the equation of value can be written as either:
Ya(n+m)i −(X +Y)a(n)i = 0, or as (X +Y)s(m)i −Xs(n+m)i = 0
Suppose that X = 1.000, Y = 2.000, n = 10 and m = 10. Find the interest rate used in this transaction.
On his 25th birthday Yves deposited 2.500$ in a fund paying j1 = 10% and continued to make such deposits each year, the last on his 49th birthday. Beginning on his 50th birth- day, Yves plans to make equal annual withdrawals of 35.000$. How many withdrawals can be made? What additional sum paid with the last withdrawal will exhaust the fund? What sum paid one year after the last full withdrawal will exhaust the fund?
Consider an annuity of payments of 2.500$ at the end of every second year. What is the present value of this annuity if it runs for ten years and the interest rate is j1 = 7%?
A father has saved money in a fund to finance his son’s 4-year university program. The fund pays out 300$ every month at the beginning of each month for 8 months (September through April) plus an extra 2.000$ each September 1st for 4 years. At j4 = 8%, what is the value of the fund on the first day of university, before any withdrawals?
Jamal works part time burning $8000 per year he reduces his work hours by half so that he can go to school Jamal completed his degree after 3 semesters 1.5 years at us $1400 per semester in tuition and $500 per semester in books. What was jamals investment in getting his degree
An investment doubles over a period of six years. Determine the simple interest rate
If the assets of the business are r15 000 and the liabilities are r5000 what is the value of equity?
