a) A perpetuity makes payments half-yearly in arrears and has a 5-year deferred period. The first...

  

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a) A perpetuity makes payments half-yearly in arrears and has a 5-year deferred period. The first payment made is 10 and all subsequent payments increase at the compound rate of 25% but subject to an individual payment capping of 100. Calculate the present value of the perpetuity at an effective rate of interest of 6% p.a. b) Use suitable annuity functions to evaluate (Dä) assuming an annual time period applies and an interest rate of 4% p.a. effective for the first 22.5 years and 8% p.a. thereafter. a) A perpetuity makes payments half-yearly in arrears and has a 5-year deferred period. The first payment made is 10 and all subsequent payments increase at the compound rate of 25% but subject to an individual payment capping of 100. Calculate the present value of the perpetuity at an effective rate of interest of 6% p.a. b) Use suitable annuity functions to evaluate (Dä) assuming an annual time period applies and an interest rate of 4% p.a. effective for the first 22.5 years and 8% p.a. thereafter.

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