ACTSC231 Lecture Notes - Lecture 6: Geometric Progression, Cash Flow, Navigational Aid

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Payments of r at the beginning of each period for n periods. R n| r rv rv2 rvn 1. R 1 i 1 i n 1 1 i n 2 1 i 1. 1 i n 1 i d a5| N 1| 1 an| an| v v2 vn. V 1 v vn 1 . Example a couple wants to accumulate ,000 by. They make 10 annual deposits starting january 1, 2006. Example: starting on his 45th birthday, a man deposits ,000 a year in an investment account that pays interest at i 3%. he makes his last deposit on his 64th birthday. On his 65th birthday he transfers his total savings to a special retirement fund that pays i 4. 5%. From this fund he will receive level payments of at the beginning of each year for 15 years (first payment on his 65th birthday). Av at age 65 is 10000s 20|3% 10000 1. 0320 1.

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