An annuity-certain is payable for 18 years. During the first 6 years payments are made quarterly,...

 

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An annuity-certain is payable for 18 years. During the first 6 years payments are made quarterly, during the next 6 years payments are made half-yearly and during the last 6 years annually. The annuity payments p.a. double after each 6-yearly period. The present value of the annuity payments at an effective rate of interest of 4% pa. for 5 years, followed by a nominal rate of 4% p.a. convertible quarterly for 10 years, and thereafter at an effective rate of 3% p.a., is R5362. Find the annual annuity payment during the first 6 years. An annuity-certain is payable for 18 years. During the first 6 years payments are made quarterly, during the next 6 years payments are made half-yearly and during the last 6 years annually. The annuity payments p.a. double after each 6-yearly period. The present value of the annuity payments at an effective rate of interest of 4% pa. for 5 years, followed by a nominal rate of 4% p.a. convertible quarterly for 10 years, and thereafter at an effective rate of 3% p.a., is R5362. Find the annual annuity payment during the first 6 years.

Answer rating: 100% (QA)

Answer The annual ann uity payment during the first 6 years is R 2 181 Explanation and calculations An annuity that is guaranteed to produce payments ... View the full answer