Ralph buys a perpetuity-due paying 550 annually. He deposits the payments into a savings account earning...
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Ralph buys a perpetuity-due paying 550 annually. He deposits the payments into a savings account earning interest at an effective annual rate of 5%. At the end of year 9, before receiving payment number 10, Ralph sells the perpetuity based on an effective annual interest rate of 5%. Using the proceeds from the sale plus the money in the savings account, Ralph purchases an annuity due paying X per year for 16 years at an annual effective interest rate of 5%. Calculate X. Ralph buys a perpetuity-due paying 550 annually. He deposits the payments into a savings account earning interest at an effective annual rate of 5%. At the end of year 9, before receiving payment number 10, Ralph sells the perpetuity based on an effective annual interest rate of 5%. Using the proceeds from the sale plus the money in the savings account, Ralph purchases an annuity due paying X per year for 16 years at an annual effective interest rate of 5%. Calculate X.
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Related Book For
Engineering Economy
ISBN: 978-0132554909
15th edition
Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
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