Ms Fleming has 145,000 with which she purchases an annuity on February 1, 2008. The annuity consists

Question:

Ms Fleming has £145,000 with which she purchases an on February 1, 2008. The consists of six annual receipts, the first to be received on February 1, 2009. How much will she receive in each payment? Assume the following interest rates:
a. 8% per year
b. 12% per year
Required:
Calculations of present and for single payments and for annuities, to make the exercises more realistic, we do no give specific guidance with each individual exercise.

Annuity
An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,... Future Value
Future value (FV) is the value of a current asset at a future date based on an assumed rate of growth. The future value (FV) is important to investors and financial planners as they use it to estimate how much an investment made today will be worth...