An investor pays the following separate amounts into a fund: £11,900 at t=6, £17,600 at t=14, and £10,700 at t=27. The fund pays an effective annual rate of interest of 11.9% during the first 7 years and effective half-yearly rate of discount of 3.5% for the remaining period until the end of year 27. Assuming that no withdrawals are to be made throughout the entire term of this investment, calculate the present value of the fund (i.e. at t=0).

An investor pays the following separate amounts into a fund: £11,900 at t=6, £17,600 at t=14, and £10,700 at t=27. The fund pays an effective annual rate of interest of 11.9% during the first 7 years and effective half-yearly rate of discount of 3.5% for the remaining period until the end of year 27. Assuming that no withdrawals are to be made throughout the entire term of this investment, calculate the present value of the fund (i.e. at t=0).

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

ChapterM: Time Value Of Money Module

Section: Chapter Questions

Problem 9RE

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