A 10-year annuity-immediate has a present value of $200,000 with annual effective rate of interest at 5%
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A 10-year annuity-immediate has a present value of $200,000 with annual effective rate of interest at 5% for the first 5 years and 7% for the remaining 5 years. An investor buys this annuity at a price which yields 6% on his purchase price over the entire period. It further allows him to replace his capital by means of a sinking fund earning 4% for the first 5 years and 6% for the remaining 5 years.
Calculate the amount of sinking fund deposit Steps and answer please.
Related Book For
Financial Accounting Information For Decisions
ISBN: 978-0324672701
6th Edition
Authors: Robert w Ingram, Thomas L Albright
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