Question
On 1 January 2015, Peter will retire. He has paid an instalment of 20,000 EUR on 1 January 2000 and after that, he makes annual
On 1 January 2015, Peter will retire. He has paid an instalment of 20,000 EUR on 1 January 2000 and after that, he makes annual payments of 2,000 EUR every year up to 2014 on 1 January. The bank offers 5 per cent p.a. over the whole period.
(a) What is the amount on 1 January 2015?
(b) Beginning with 31 January 2015, Peter wants to make a monthly withdrawal of 500 EUR. What is the present value of the annuity after ten years? Interest is compounded monthly at a rate of 5 per cent p.a.
Step by Step Solution
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Step: 1
To solve this problem we can use the concept of compound interest and annuities Lets break down the two parts of the question a To calculate the amoun...
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Frank Woods Business Accounting Volume 2
Authors: Frank Wood, Alan Sangster
13th Edition
1292085053, 9781292085050
