"A man has two 20-year annuities-immediate. Each has a present value of
1000. The first has annual payments and earns 5.8% annually. The second
earns 5.4% convertible semiannually with semiannual payments. All
payments are deposited into a fund that pays an annual effective rate of 6%.
What is his accumulation at the end of 20 years?"
The solution says that the payment for each year is 85.77+ 41.19+ 41.19*(1.06)^0.5 which equals 169.37. (The problem can be solved from there). My question is: where does the 41.09*(1.06)^0.5 term come from?
Thank you.
1000. The first has annual payments and earns 5.8% annually. The second
earns 5.4% convertible semiannually with semiannual payments. All
payments are deposited into a fund that pays an annual effective rate of 6%.
What is his accumulation at the end of 20 years?"
The solution says that the payment for each year is 85.77+ 41.19+ 41.19*(1.06)^0.5 which equals 169.37. (The problem can be solved from there). My question is: where does the 41.09*(1.06)^0.5 term come from?
Thank you.
Quick FM Problem
0 commentaires:
Enregistrer un commentaire