Over the next 25-year period, an investor needs to make nine payments of £450 each, hree-year intervals, with the first payment due at the end of the first year. The investor, owever, would like to replace these by an annuity certain with the same term and pres alue, but with payments made annually in arrears. ssuming an effective annual interest rate of 9%, calculate the revised annual amount t vestor would need to pay.
Over the next 25-year period, an investor needs to make nine payments of £450 each, hree-year intervals, with the first payment due at the end of the first year. The investor, owever, would like to replace these by an annuity certain with the same term and pres alue, but with payments made annually in arrears. ssuming an effective annual interest rate of 9%, calculate the revised annual amount t vestor would need to pay.
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 41P
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Transcribed Image Text:Over the next 25-year period, an investor needs to make nine payments of £450 each, at
three-year intervals, with the first payment due at the end of the first year. The investor,
however, would like to replace these by an annuity certain with the same term and present
value, but with payments made annually in arrears.
Assuming an effective annual interest rate of 9%, calculate the revised annual amount the
investor would need to pay.
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