An individual invests a series of level payments at the end of each quarter into a sinking fund, with no withdrawals allowed at the following annual levels: £1367 per annum for the first 7 years followed by £1900 per annum until the end of year 26 (inclusive). Assuming a nominal rate of interest of 5.5% pa convertible quarterly throughout the entire period, calculate, to 2 decimal places, the value of this investment at the time of withdrawal of t=31 years. (correct answer = 125712.75, ONLY formulas, no tables, please)

An individual invests a series of level payments at the end of each quarter into a sinking fund, with no withdrawals allowed at the following annual levels: £1367 per annum for the first 7 years followed by £1900 per annum until the end of year 26 (inclusive). Assuming a nominal rate of interest of 5.5% pa convertible quarterly throughout the entire period, calculate, to 2 decimal places, the value of this investment at the time of withdrawal of t=31 years. (correct answer = 125712.75, ONLY formulas, no tables, please)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 26P

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An individual invests a series of level payments at the end of each quarter into a sinking fund, with no withdrawals allowed at the following annual levels:

£1367 per annum for the first 7 years followed by

£1900 per annum until the end of year 26 (inclusive).

Assuming a nominal rate of interest of 5.5% pa convertible quarterly throughout the entire period, calculate, to 2 decimal places, the value of this investment at the time of withdrawal of t=31 years. (correct answer = 125712.75, ONLY formulas, no tables, please)

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Step 2: Computation of value of investment at the time of withdrawal of t=31 years (PART I)

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Step 3: Computation of value of investment at the time of withdrawal of t=31 years (PART II)

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Step 4: Computation of value of investment at the time of withdrawal of t=31 years (PART III)

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