16. (a) An investment secures an income of i at the end of each year for n years; plus a capital sum of (100+k) at the end of n years. What is the present value of the investment at a rate of interest of i% p.a.? (b) If the annual income were reduced to for t years, plus a capital sum of (100+k) at the end of t years, find an expression for t in terms of k and n; assuming the present value of the investment remains unaltered as in (i) above.
16. (a) An investment secures an income of i at the end of each year for n years; plus a capital sum of (100+k) at the end of n years. What is the present value of the investment at a rate of interest of i% p.a.? (b) If the annual income were reduced to for t years, plus a capital sum of (100+k) at the end of t years, find an expression for t in terms of k and n; assuming the present value of the investment remains unaltered as in (i) above.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:16.
(a)
An investment secures an income of i at the end of each year for n years; plus
a capital sum of (100+k) at the end of n years.
What is the present value of the investment at a rate of interest of i% p.a.?
(b) If the annual income were reduced to for t years, plus a capital sum of
(100+k) at the end of t years, find an expression for t in terms of k and n;
assuming the present value of the investment remains unaltered as in (i)
above.
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