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An n year annuity which pays k 2 at the end of the k t h year for k = 1 , 2 , 3
An year annuity which pays at the end of the year for dots, has a present value of
a Show that
b Let be the present value for a perpetuity which pays at the end of the year for dots. Show that
c Mr Seven makes end of year deposits into a savings account which credits interest at an annual effective interest rate of The annual deposits in sequential order are and Find the accumulated value of the annual deposits just after the final deposit.
d Refer to c Mr Seven has decided to use the accumulated value of the annual deposits to purchase a perpetuity immediate. The first payment for the perpetuity will be exactly one year after the th and final deposit. The payments go as follows. dots. The present value for the perpetuity is based on an annual effective interest rate of Find the maximum value for
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