JUST Q2(b) and (c), I do not get what they ask for. Thank you so...
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JUST Q2(b) and (c), I do not get what they ask for. Thank you so much!
Q1 It is Jan 1 in 2020. A person puts 1000 per month (starting 31 Jan) into their superannuation and earns 6% interest (tax free). They retire on 31 Dec 2059. Assuming monthly compounding how much do they have in the bank when they retire. Use the annuity formula. Q2 (a) Suppose someone is offered a 6000 per month annuity (on 1 Jan 2060) with first payment on 31 Jan 2060 for 20 years. Assuming that the required rate of return is the CPI 3% what is the present value (on 1 Jan 2060) of the annuity. (b) What monthly annuity would the person in Q1 expect to get in 2060 dollars) using the accumulated value of their superannuation. (c) What is the present value (in 2020) of the monthly annuity in Q2(b) in 2060 and in 2080 assuming a required rate of return equivalent to CPI (assume 3%) compounded annually
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JUST Q2(b) and (c), I do not get what they ask for. Thank you so much!