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2) (3 marks) A person aged 70 wins a lottery. The lottery pays out the money as a temporary life annuity due with the following
2) (3 marks) A person aged 70 wins a lottery. The lottery pays out the money as a temporary life annuity due with the following payments: $100,000 annually for the first 10 years (i.e. first 10 payments, & first payment made at age 70) $ 50,000 annually for the next 10 years $ 75,000 annually for the next 5 years Using equation of value techniques set up an equation that could be used to solve for the NSP of this annuity using the stacking method (no calculations required). 2) (3 marks) A person aged 70 wins a lottery. The lottery pays out the money as a temporary life annuity due with the following payments: $100,000 annually for the first 10 years (i.e. first 10 payments, & first payment made at age 70) $ 50,000 annually for the next 10 years $ 75,000 annually for the next 5 years Using equation of value techniques set up an equation that could be used to solve for the NSP of this annuity using the stacking method (no calculations required)
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