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Increasing annuities due Q7.10

Discussion in 'CT1' started by shdh, Jun 23, 2016.

  1. shdh

    shdh Ton up Member

    Hi guys,

    I need some help in question 7.10 on page 10 of chapter 7.
    Why do we take 40 pounds as level annuity payment instead of using 50 pounds?

    Thanks for help!

    Warm regards,
    Shyam
     
    shdh, Jun 23, 2016
    #1
  2. Varsha Agarwal

    Varsha Agarwal Very Active Member

    yes beacause 40 pounds is level amount for payments that will be discounted using (a-n) function,while 10 pounds increases in each payment that will be discounted using (Ia-n) function.
     
    Varsha Agarwal, Jun 25, 2016
    #2
  3. shdh

    shdh Ton up Member

    Thanks for help!
     
    shdh, Jun 25, 2016
    #3

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