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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.

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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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.
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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