Mary establishes an investment portfolio that pays £5000 at the end of every year in perpetuity.This income is split between three beneficiaries.The first beneficiary ,Ann,will receive the income for the first 15 years,while the second beneficiary,Bob,will receive the income for the following 15 years.After 30 years,the portfolio will be donated to a charity.Assuming a 5%p.a. Effective rate of interest ,what is the present value of the shares of each beneficiary?

Mary establishes an investment portfolio that pays £5000 at the end of every year in perpetuity.This income is split between three beneficiaries.The first beneficiary ,Ann,will receive the income for the first 15 years,while the second beneficiary,Bob,will receive the income for the following 15 years.After 30 years,the portfolio will be donated to a charity.Assuming a 5%p.a. Effective rate of interest ,what is the present value of the shares of each beneficiary?

Advanced Engineering Mathematics

10th Edition

ISBN:9780470458365

Author:Erwin Kreyszig

Publisher:Erwin Kreyszig

Chapter2: Second-order Linear Odes

Section: Chapter Questions

Problem 1RQ

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