Actuarial Science 2053 Chapter Notes - Chapter 3: Discounting, Savings Account, Asud
20 Jan 2016
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We denote the above sum by the symbol (read: a-angle-n-at-i) a | in n i. This is called the discount factor for n- payments: if the ordinary simple annuity consisted. Notes of n-payments of , then the discounted or present value is: A = r a | = r: relationship between a and s, to determine the relationship, let"s n) i in i draw a time diagram: periodic payments. You can buy a car for down and payments of per month for 5 years. A woman has reached her retirement age of 65 on october 15, 2015. She invests ,000 and buys an annuity with monthly payments, first payment due on november 15, 2015 and the final payment due on july 15, 2039. What size monthly payment does she receive if the interest rate is (a) j12 = 6% (b) j12 = 3. 9% (c) j12 = 6% for the 1st 5 years and j12 = 3. 9% thereafter.
