Ms Fleming has £145,000 with which she purchases an annuity on February 1, 2008. The annuity consists of six annual receipts, the first to be received on February 1, 2009. How much will she receive in each payment? Assume the following interest rates:
a. 8% per year
b. 12% per year
Required:
Calculations of present and future value for single payments and for annuities, to make the exercises more realistic, we do no give specific guidance with each individual exercise.