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EXCEL Questions. Develop your answers for each question on a separate tab and submit a single EXCEL file. Put your final answer for each question
EXCEL Questions. Develop your answers for each question on a separate tab and submit a single EXCEL file. Put your final answer for each question in the Answer Document and submit.
5. An investor is considering the purchase of an annuity, payable annually in arrear for 10 years. The first payment is $100. Calculate the discounted mean term of the annuity using an interest rate of 10% p.a., assuming (i) Payments remain level over the term [1 mark] (ii) Payments increase by $5 each year [1 mark] (iii) Payments increase at a rate of 5% p.a. compound. [1 mark] In all cases, show the cash flows for all 10 yearsStep by Step Solution
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