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IAI Nov 2012 Q14 (i)

Discussion in 'CT2' started by Srijana Raghunath, Aug 30, 2017.

  1. Srijana Raghunath

    Srijana Raghunath Member

    In solution, under the heading Incremental cashflows and NPV, 10 year annuity factor is given as 6.33. How is that calculated?
     
    Srijana Raghunath, Aug 30, 2017
    #1
  2. Simon James

    Simon James ActEd Tutor Staff Member

    Hi - this looks like an annuity payable in advance at 12% for 10 years.

    According to tables a(10) @12% = 5.65 (ie in arrears). So 5.65 *1.12 = 6.33 (in advance)
     
    Simon James, Sep 1, 2017
    #2
  3. Srijana Raghunath

    Srijana Raghunath Member


    Ok..i did not realise it would be annuity-due. Thanks.
     
    Srijana Raghunath, Sep 2, 2017
    #3

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