§3a. Basic Annuities ‘The Geometric Ser s Trap ‘Trap Alert! nia shapes weg oe ty of nis, Ax amy ily a pl sere of payment. FReexample ef termine i resent ae fan sat 1.00 pay tt cd of each Pr mente ++.) ev 105°? Yuen ee athe PY iste sum oa emer ropesin (Years gs, college mah po of ce of heats sinless te ube ef compen ines 2 "life pom opr” Of eume he ever fore sl tas) Because promi sees opty «ery inpranc oe ints subject, you must aos bo sm ‘hem comely. Migbe ou ink yo do bt ar experience a en at many des al {ng inapng ie sommato ermal When we sk snes som sie sch sts inthe ‘hee enmpler ourett dln tbe sansa ou a ited asec roma MeMEEAe. OEE aD Resmers oe fran OME a) 1 yu gt deren snes, eat heck whee hy a lel tower Asn aovering() you cold have wd ned (+) ‘Yes probsy ed the lowing ama forte sama geome popes: 2 seer ithe fr term, isthe common nthe ber of ems Unter word hie Fria pes hum fhe ee tartare -t tam!) Some dens remember hie feat #7, hr the umersor on he nese sth eter is the (tes) (Got erm ie tetera ora term or Capp 211 AS eae 107sxc §3b. Bas Anais trp or some ues for thy ste he esptent te nem nthe tego hey ‘makes in soatinerar Ts wy tose sueh aps loremerbertbe rms a won ‘etsy You sno ct go mon yo rw the oma he flora my {iter my T= stem) Sn se no soon ne wl ee ow {One way to coutie munter a trmiher anon your Sgr irl» 12 whee ie {heen oft en afer hata erm, Te exon of eesti and he {aerement hc expont oer orm) we thik omel inter he word. we 1= 95 _ ott) ae ae Forsefes(b te stem is +M4 heros (++ 72(0rH(14 8 antheramber ‘Tienes (hich coud by its te ponent (1+) em as = To by wing he xpnens ihe (1+) mss 2 = 11) Asin aun te oun ems he Words hae: capella sre Ph Tesare soar) me . as oe ‘which ame fant spe si —a40 “The geome sees oma ina snl an eso wera: Were yo treme itthe si Ene enton wir words nen of symbole Prete ving ike 9 mat emer ow yo used chante qunratcFrul) anl ou wills align the was a ato Annuity-Immediate and Annuity-Due _Almst everyones had eperence with anes I yeapay et snc pemions, moneste ‘aymentpoymrts on aero cole om, he poets we ah ay. goo meee 8 Fegtrpyeoc, you ae evn anny. Sees) Yor may nce Soca Sent Bene te ‘rs company peso fr Me tog dhol peso plas ths Kid eon he wane). “Tae soft word “sys the Ltn ante) frye" hese esd emal payment Sos omthing fn oxymoron se ef "meh ama query ‘omy ce bcs er he word led ‘Present Value of an Annity-Immedlate Leonid avery Sy mt payment he em of ach fr es Cape 0201 ASM 0$90, damit meie ad Ant Dae Wevttetetey wet) 0 may el rom Sato) shat = ‘An any having tes payment a yea om nw feels annulimmene” (s2 {isang tal "immetine” whee spay mele) Te PY Bs peel ‘symbol ap Ths itendeangln a "Otero meres andenoed, ecu) ‘Aisin, yo owl pace ging neal eS. Tao Clr Nas 4 ong ‘Sinatra efeive Ait cod of yer you we eng 0) Inthe scat Youdo hese ing atte yess 2.3.-- then each ya os rth wichrwa youl ve 1.00 cout you kha ad eth secon. we reese psn loa syed of 1.0 pean orn yer he sen vale ofthe nw foe os, we ae be fling eguton oa coun, the way we ne 1, tise op and wean dees formule wid mating -Accumblatd Vale of n Annuly-Immedite Ladin AV sym orn pide (Nth te AV of an sas immedi meas e AV aso he Sto hes paymeno eps) The AV hse pei epg 620 ASA din 109no Accumiing te payments tien, sting ith he payment we ae: se lee De FOE ET ‘ote caefily hat gem ei saw andes wih 49) = Wadena t=0e0 7 ‘Ot reer san sunning omer ees pia we cout ve edn hei Itnces oy anda, A al he spol rpc ale th some payment ‘ferent dats wche wean sper Ts we hae reac sin (12) =) ice (14) and cps chipsit we caten youth sa cpely simple essa dscon edly ge308 soul sow wen Castor Nets 5 asian do role 271029. Present Vale ofa Arnuiy-Dee ‘Sopp we wantbe PV of ny With payments whee Ie it met day. bar Pelt rttele sich rend s ube dope it dee. Te PY hs the sya * ‘niet oma fran nny de a ei te dese: ae Cope 2911 AS. ioe(0b, Ancien sd Ani Due Relationships Between oq and ig “Thc bios lanier he “edie and fms of aay. and ateth penn al of hse pgm, Dt ul otha oy 2 eter ‘hs, ve faa tt+ on (atyou have ay out sha i ask youl wich you wold rahe vey: sero ayo albino he same ses of ayes Dein aew fom nw. Cle ou wnt be pment Begin a son at pil sy geen op pai "ton ‘The i eter sil elonsip teen he ins” and" frm. T dee we tps 2 gue at weal "ww ousee wow you don't” (We'll sone mre Seton [XB ete gram ote sy ae Now: cover up the yen a ime Omen with your ng) Wha’ ef? Answer: An oie w= ppm Swe con wee PV af namie payment ‘151.00 ate 0 parte P of an anime with one payne fantom Naw um Coeur Notes 8nd poems 3nd fr ace ingen eer ‘Accumulate Value of an Anniy-Due Byte AV ofan sani, wean AY ome perder eas pen te elon fadsnsaeesceom ear ie serch hms eis wth (49a with (1% whe the sero Sphegar ih Taner win t+) Summing sees, we ae asm —a+09 10+ we revnese of umertorint deromitor arin (+) "owntaiin the enonistor (tme1_ aso D a ‘con 0201 ASS, ln msone §3c. me Ene. esedenanrettonhp ented” "rm Frpeet snd an do heme oracle value, Wich wank moro? Chet ou wood here te AV of i of eps rafter tea deport tha he AV he sie dept on the dat of he es depos Parlor fal te ae 5 oe Sear es Haein ‘As wecouldplay"row yo seine you dno pape mre securely. "nw yu et Seow yond) oe Low a What we ave does place eins depos at time koe ime te bat meaty sc ita tne» below he tine ine, T aver the AV of thoi ny ea the ne Now kat ofthe deposi can te Seas ne: Tek AV a men ste AY ‘an mtn r+ 1) payment ep Baths AV ows te we AV ye Shine mot ec The ee ete oboe clon fe ‘Now tm Ctr Notes Sand probes 32 an fr pate ingting mel eis fortes naling Problems Involving Both Present Velucs and Accumulated Values “Tamia Caco Not Sand do probes Mo 36a camplrof potens wie bathe PY The Deceptively Simple sz Function ‘Trap Alert sn isschasinpe eno: Wrens tacos te eps} sof hed ‘het dpc But dep s apae sil, is ap ands mae or Ws Sen, rset, ths Wht the sy forthe AV a eons | atte being of exh ear for yar te def hea deen? Ti frs mm nd we or aver ou yo ee orang tt 908 wereaupt in te srg We wil mo ie obi nsw Leconte owns te Statons 2 an (2 doe che end ach year fr Syst eee How chin the ac tebe cat ofthe lt eps” ‘Teedagrmis:{Be The Deep Sipe ss Fucon Tesh e ny dt tt he A ewe be AV Seon depos, sapg with he las oe wou ok i Warseasros iam sasrsasa a Ingen sg=1 (4004 (1-40 4,4 (1+ ae carly tha he sie for sep th fens wi Fore et exponen = en te mabe of epost Tepe he AV het eon wich os ae i (en repens he AV of be it pon, wih was nd aie = pends (Now ost nwo testo: is koe t ndo he hoe eh Sears How mch sn esate ee ea Spo? ‘aos yan myocar. Lao wat wet rg, “Te tine scale cn case cofson, Wout it change the answer othe ueion if we | Fe ee ‘Wek you woul are have tg Fey a ety gig "he des doa cane the answer wal Nombre aber thine agra he snore sl te seman smileys oh dee of poi Wareasnecaceasmeasat hse dict eer a In i he he es Ine agama ows pew! In hs eon. eta he anwer i ‘The pits that hei seal aay ad de chang the anewerferthe AV af the be of th at depot Unfoany wee t cofne ys le urs dt ie pm eo 0201 ASM, ion orsicnon 3 m4 he accel oe of Seal dpe of} of te dat of he last depos i als Zyvbatarie payment ae beled bee» inet 95. 6191035099 yo recone ha is seme ie, yu se wel on our ay oie (© Finally, we come the question ts soon open ities te ening ‘sch yearforS yeas How mah oe scooton eo ep “The aivers hse fr) and by 2p Ths le mumters adr he payment re Jot tengo 10 make ams, pas i 5 Fly Ba wee se Senate we, te sceumusied aro pais he i fhe a on Wate Ueo+ Us EUE PHC "Nos thaic hst depesis mde te se of ean me and eet depos was make (r= 0 peso, whe le wuld ep tid the tap ea woul nk yourself unin when comeing epost (1) Wah a dept jt mae (La of edie YU a comping hous ‘ Irie anew ene Aa tn pe ati (2) How many Spots mortar? dere were mp he AV Son ‘epee fw the ms aga os. Copeho20 ASK a esseCalculator Notes #5: Basic Annuities Wen you do poems inahng sees, Is ae ue the TV hy han ii se et miles You wil be ng a of he TVM hey lig Se ETD By The ei or {eevee aymert, yosemer So te varie (8 03 ET ne youn see eenowe dh vile Yue doe same wing EDs ono tbe vals rer thn Problems 2106 involv og 22. Find he PY of 1 er anny wth anal payne of 1.20 tan cetera ra of 6 per aan camer Tv (sts emindertoabay cere TYM reper al eto et prem) 109961201 20ERD CDE “The aower lt ~$8 2.10102 dco 23. Find he PV fanaa medie f S100 per ana fr 5 yeas a ee. 159 eo BENEDED “Teaver $1, 11184 24, Pdi PY ofan nmtyinmesine wt payments of 350 every 6 manor 10 ears aroma 201920050 ENDEEDED The aower le -SH1757 25. A12 yearly immedi puted for $1000000 5% ete What ste evel al met povided ys ant? nBssIa neo TUE 26. Aan of $00 ioe psy el guy insallen f X the nd ah uae ovr ‘Syerpeda moi re cf mens of component are. Deen BD oe “The avers $8685, Problems 2710 29ivole sa 27. Ja pois $250 te eof ach man For Sern an secon arene at (et pest nis prbtem ef the or varies Eder a Sine we wa scum ae onthe di eas dees he ane ol Frm 52505503. Te ess en smog SEDC Copel 0201 ASM ase ns2% $1,200 [5 deposed inn acnet on amar Hof ech yeu om 200510 2018 nce, a3 symbol orm he ner 200g (Ne ha tre re 1! dea fom 200510 2015 Ihe, anda eqn for AV th dn ean ost tery 1 2015) ‘Tas isis tacoma rae of an nym) The Keres oe 19310 1200 E7=]EMTICEDEY, “Te sno $1526035, 28, Win quincy dos for 6 yer wl cua 10 $2200 one dee dps ata emia te of inex of" composed ay? 2419175 2200EV ENED oo Probleme 30 and 31 involve 3 Fad he P of analyse wh payments of 1.80 cv 6 moms fr yes noi fc foes of pr amen cond soso. “isobar he PY of nay wt pment te exon ech mo pid {or pono tan mere re of 23% fpr The sonora sme rms LAO oF 1800129. oF LS +o) ‘he ctr ts 2 1BGN) hey. seemiy oe EAE hey ih a be ed compan mci. We il J te robiem whan withoe wap BGN] ex. 4, Without asng he [BG] key (eat eyo an END} ike yo ela BG] med “BGR how inh per ‘aban comet of te Geo Tochmgs END) mode sc tlon) ‘Weisel 1.8 25% a thm mult by 05. (Tisishsed onthe ont ‘Te anor is $24,048 |, Using the BGN key © Top sire 6 ise tat you conse BON eons eee sve, Bate ave war you ‘hit vty eget a yor ain [DGN) de her you ove oar obi The ‘lento ites [BON] made ver 9 ere TV heb preg CB |CLR TV adil on te aly ate hg ow do you sr his pO oe pfs at uth BGI yf ec lpn prion jou cad compat atime sed may by (Ia we 8d sve Ys cul at comput te PY of an anak-mmedie wih oe let poyent an he 9 ayewat (Ths aed one ly s+ 2p) yo dodaci eu the[BGN] eevee sn snide. prea hou me ae ia hen you eve on ater mse, ou te th core afer at pom “Toptthcalsblorm|BGN] mae, othe Fawn Cone O™I ASH, inker Nes 8 Bask Anes vous g you repel ie nso, the hand sie ote ply willaema bees “END” and "BON" Wien shows "BON rm sada casa mode by resin (QUIT You se now in BN] de, and BGN" wl be show in sl fot in te epee of ep. “The ey for robe 0: 16092500 1 500BSTCENED escepttatthe ast ep of multiplying by 1.025 is mined. Of cows this is becuase you ae in [GR ese wtih rey eee an nny 31, Mary deposi 13.00 iy in tk ering inet» nonin ea f $5 compounded fst wibiraval ey. Detemie X Xs soln of XB = 15000. (Ne tat by envenon “monly wid fr 6 ess ens 72 wir bot Se fe it wil tas) 1 Wihout using the [BGNT key Maes you in [END] mode The ayes Se RSTDsKo RITE ‘Api, you ve cea he win ha Mary cou mt ee of ch ‘ice yoo in|END] mode I Mary maker each whirl one mothe you met map is oun by whe v= ("and eI he efece mety rT epee, O92 SGaKIES ‘Teams ~$04057 2 Uslng the (BON) hey ake sue you is [BON] mode Use he sane hey a in) xp for thea ep of ruling The novels S207 ore Problems 32 and 3 involve Insymbot frm the amir is Ag 1290-4 ig L290 ~ «Without using the [BGN] key Makes ht ou an (END) mode The eaves re M0 SSRN Lo ‘Te aon $21,553, 1. Using the [BG] key Make set ou ai [BG] mse Use esa estos asia a ca eats tli by LOD. The swe et ae a bre ope 0201 ASM He ekion Wwne as Ames 38, Andramas epee oD onthe ny fac methine 2010 drogh 2915, ince, spomie ra of per ams conerae on How mich sin Sex “Tis ete AV of many, seh at of aon any 1,246 neh er "he bt pt Ter re 72 epi, Tera 6 ee rm 2010 tough 20, nie) «Without sing the [BG] key ‘You muse in[END) me. The keys ae PB Aree See [Alibi poi you he acl 10s 0 you mast mil by 1p te eine mohly ene EDS “Te anor in S6.968. 10. Using the (BG) key ‘You mut en (BON) ose. Ths hye he same a (a), sep 30 oe ak sepa mainte y Problems involving both the PV and AV of an annuity | mates 15 snl dep of X, wich ae ju scien 1 allow him o mike 6 anal ‘drat of $1.00, it wah oe Jerse ft depot nice ia elev ‘The mest coterie compar ds sth dn of he It depo Xe slain of Xg [ody a Fam, lee Bt ghd te oh aon Sc hi ie at ht he 1S deo of mu ascmulte o, weer in EW and pod om hae The aes we 8135 ooo TICE 2 CLR TYME SST The amor 29952 1. Ateryoucharthe TVM egies he PV (x 6.48.21 islint dy. oleae ‘nD sey by psig at. 2 Anademote is ont he siep 2a [CLR TVML You would ten se te Repsol ssoReceeMT Asinhe none 209.52 eee ae ees sence peegamI Stor eoeee ceo 38. Same poem 34 eee a te nr day 4 fete immedi arth ‘The eysvker ar asc the same ain problem 3, hath es te sere a 4% thee tine ope 0201 ASH eon @“The answers 31201, Nt tat ese ovr ieee (4) ced aig witha Pe th os Xe ager an wa lem 4 (31201 29:59). 236, Depois $100 ae made vy month or Ses ino an asa rng inert Pom fn of 9 convene monty. Sarg one nth afer ea cro, cy howl of ‘mt oni npn eh i fe og Te ge re Edict Senipnafbocioie Teta 085.1512) oD EPHEDRA ICL TV 2019 7S EHCENETD “The anowor e854, Cope 2011 AS Haein 1‘Summary of Concepts and Formulas in Sections 3a to 3¢ (1) Theten wy woremember forma othe poetic progres in woke: Sum of geome prornon = (btm 2) PV ofan enmity emt Heeoae 1) AV onthe te of ea Fama san 4404-40 cir ©) ) Poteau Lene eote sade (ine (a) No 7g he enn nese” ad he fon: (5) Reluionatn aween ty ome 2 amy: fas 040m =1 tm (6) Avid egg The AV ote dt of thet pac (i ete yen fers of how the ine dag enor The AV oer fe he a tant Fae te ane pment 120 Cape 2201 AS doni Eri Quen on Sees a 8 Past Exam Questions on Sections 3a to 3c 1. Amana 40a ad wisest rove sopplenera rie menincoect 3003 bo iain {es and for 2s yeas Teed ara pial re 8% conpnrd mony Ec 1000 ll oie fr 9.48 cote epiingech met arg om 6s bh ae sof Cate X(1001 27) mers 7689 (C)SIRIE O)I8EES aM 2 Swarand feck mat eps of 10a Be end fee er or gets. ‘sual witha of or 1S yan Bat fds ves loc of flere ast ral Sit’ ind as aleve Ire ate of 85 JP fonder an sleeve Ire ro 0 (cca ¥ — (SAMPLE 27) orm a OA ©1263 5. elf an Jo shared eu in an ince Using i inne, bn imei ought = 10ers wl sna amen of ‘eat hii nan iene a ang smi fee nes mt of 97. Two ser ef top 15 ena ediue wih otal jen 0 Z The lesen vibe o bth anes ws eerie cng nan effete neat eo. Coe 1804 186 44) aime wm E15 w)2«5 EIS 4 Aine 0, Pu dps Pinto fd cing ines tan efecto ‘Aticead fach yearn yare6htagh 20, Pal withdrawn omnes an Se of 100 per meth or 10 esa soni ie ra 2% cmpeded ony. iene PSO 193 8) ayaa (62000 (€)45000 (O)44000 4500 5. Aanannul efecve ne ate of 53, an ant mee wth el anal ayes Daemin th ono el prea ale eres by he seo payments anh ‘rat oF paymens conned [SOA S83) HSH (EE CHER (HEE HOR 6 An isin etre an inl pyre of 100 adn pp ment of 100 oh end of ‘Scher de fa Toye San he end heclesenh ear, be vein ou re ee ‘soul paymets acmine Xe else ate of 10% oe ie 15 er period [0118249 (i070 090 (C1108 1120 113% 7 sues sbold seal pear Secon) You agen an animes wt 1 ‘amd yet 10 an fal alo yma mh ono 2 yar A an sna eee inert 35 te rset alee Oo ale apes i. Capp 02011 ASH eon 212 1m Using a ral five tof cle ps vale athe ning of ih yeaa all emasn eye (SOA 1/946), man wae CD OED HAS (ie gesion salary appear afer See 3) ibe stl at se cn rive a 250,00 death erst mfr stn’ de sane ‘na! ln of 200 he eponing of ech year SI sear dl ment oF 16265 tbe eglaig oe 128 eae Aras, Kinberzy may rece nr inte 1,00t he pining feck ear fore wih cramped ef 0 yen Catach pes al of Ler defer He sama doe pram a Kimbrey' Ive ap (SO 1189417 as 90 (85 (O00 Is () Kner ie tie df er woot 2 ye any. opt om. (3 ean eee ner ory fy. Caine SOA 390) w£e wes oe oF wF# termine on egesion fr 3,0 11867) Deeei a 7 WES o EL oF ONES © MER 033 oS 03 0 33 oe (Os Janay. annsn: company as 1000 wich eo Link if nsns es ‘et He cosas arecciethe ne saaly oe ped 1 year, hth fr pen Immedialy The benef he moses ted nun feces or stu, nay ay 100m espener and nso malin poly. ‘Auibecod of ite yes te emgany as Xreaiie (Cette (SO 18 16 (anton AIO COT OSIM «0 43m ok 03 2000400 consti lon, ded 0 im ine names The Ss inte of 000000 shun immetoyslt lawedy two 0.00 na ‘The nro he fu cedar of 15 comer seisnmy ad eat tothe endo he rcnd ear Al that ne, loan acumen be led 8 {et thesia ad ner er, The monly mange pyment das exo ya oer Inn dtr of he cosine am Ceca he ot oft 10h moneae payment (SOA S88 #12) 123s a) 18359 (C1677 D495 (Eas “Te prceds ee aiinurance poly akon dep within cid a teendo ah aT became wh fen aed eschyen n= Ile, ‘Ae misma nurs rio Mpa inh phe ca scl wide wold be Cameo 0201 ASM eton"ss Quon Sion 38038 ext a er The ate amount widen he en of eat Cae Wi (SO 1087 #1) we oh ning eto 1 o ms oie oy i) 04a [808 0 17 (ote hcty and only (tnt (A edt (2) ear onwer ea gen A) (CLE) 1, Acmpsy lesen on December 3,186. The company isnot hat ihe mom ‘ew bbs fanny 987 Ts atl nd oto years The canny wishes ‘oleate the percentage ners ly 1986 ssing cree of 12 omg rom. S04 17681), 3% Apeonae 0 wii rennin aX ed Sales peta 2 15a i any immed wt spy 1000 FX [SOA SAMPLE/EG 1) (assum @ss C)NS (SSR —)SLAI0 17, the einige er forte en $105 ‘Aa simple anu nesta of, hemo is the Semi 1.25 a he nd en “Tone SS wha would etalon te coun ee of en ya ieee aden conponed tan ese seal erst ro [CAS 1124) siais sign CsIa% @)SI3” SIR 1, Anema prides payment Sa te end fac ee for ea The ec anu neste Wins te presen vl of he aon? ICAS 18247 ove [l= (6)'] we [t+ (ny) (oe ering yet Orarnr Or — wes te 02011 AN sen ay‘Solutions to Past Exam Questions on Sections 3a to 3c 1 Ayan pus ye smen hat “Ech 100 wl poi Sf nce seeping ‘each dh argon ts Shiba ul beendof reo te Mary sues ‘hot knw wt is woe, Te semen tents own af ony ey "ti ldo someone fos ong ashe eh esate han for aed rena er of ted (Obit the PV of ae aoa per on mona ess wel ster) Ue nies coed in erst sams, 0 might be conser ni to nce is ror iereed or an FMV? stent answer Ae ans produ sold by Be ie compares Wha the tome mean i ‘te tan ys be arse company $100 on Byte cmpey wll pera 1 ahi 885 he bein ng of ache orz og ae es Ihr pote te man {oreeave $0 permnt frie staring at ag 68,11, 000 would pure 9.65 po, how mich she reo the compan usranee SAD per moh? oka hs tat i 1,00 gurances $68 per eh on AB putes $100 permomh Sot sree SX. per mam me muy hi by 3.008 Amountia be pd a ae Sto usr nonhliincome of $3.00 1 of contos aap 6 = Nig “Thc mst il 3.000452 to provid 3 mem some of 0 frie SOOAEP | 1OMHO ere ANS A eg” 9517 2 The most coment comparion di of heh ye St 10g Ko 8% 290885 J 10e= orgs 10 y= 42228 arg -xenma ANS) 1 The amo foe's initncls glock tity dette ‘Shs tn tn tre gel mene, she no 0 2S We afl he J nme ines inheritance foro year a 95 fleck Foi hiss can y= jeanne ecve wi a ama Fy oz v4 ‘Cane 9201 AS tonSota is xa Quon Sze 31936 25005 ay (100 = Zag nos MSIE si476 ANS.) 4. Pua hds Oigg, =7.98. 26th endo er 61020. Pie PV a hese widen 00976 M8 10868 ANS.CA) c.9. 768068898) {ine cat so be expel 7.038260 o) age ate ae 20 pyran he ‘ech PY of iS imaginary paymen) Ocoee gee me ural a 14,138 006, 063% = 6 Ne, The PV eet aye Og = 6715.76. “The PV oe thrdet of payment ie 96713 76m 228846 Twa PY = 16113 Taste peng ofthe al PV dato Was 713642.23546 a ase (6. Vsti end oft 108 yer te comparisn dt The AV he ayes 11.000." + Logg = 4187480 M1980 ogg, X= NOS ANS) 2 N00 1000 + a3 Nats () The al payment cone compue using he BA I Pa by nrg 12551000 {BD 100 ESN EPDIED The ema 5087 al pyre 0045087 = 15087. See {@) The queion eo He ambipous. The PY "a he paige lth your” col be (i qusion shad stl pes afer Scion 3) “ThePV fie fits ha Kinny coldeie mut begun he denon of 50,00: 20.00: 2500 + 16.255" “To sae 0 wing the BA Pa, i he alee in [BON] ode (Tis i one af hase probleme make ich wo ai ie (BGN] mae) Then ene 116] 2000 0 25.000 (EEE 164255 EEIEWIEPDI ise kyle ome he ers or which be PV [C11 payments 25,0050 3 Sl payment of 152653 ens 50.00) The se apne 0201154. theion asKinbaty’s sherri 13.00 a he oping of ech yer for 10 years cna Sof 1.00 free. what needs IO ear deere ie snd er dfoed We mewiy-e thd pepe 1, Tas wha the ton) Then we ae: 13.00 (p+ 2) = 250000 _ 200 Tom SS ) 9 From) we ae: Sanat ntndemnet mane avout That 0” -G) (a) + +(E) 10, Topsite ofthe ners. cues ai slows ayteeg a ates Mapyng mentor nd desomintorby(+): o_O siytey Petes 32 ase ata 11, Aaa ee = 827 = 1m00H185" = 864627 ag — 1a ronan 5 = sma. +1015 70 ANS.) 126 on 0201 ASM ©sus Ps Em isn on Seen 188 12. ttr= mend songae Foye eS yea, we ae sig eof 2 ear abe compro + ao +5000 (1078+ Lor!) =2.54.450 asus 1 Fee Mikey. Fi LOCI) vn A (12) (Fate (22) feta =a ~ ee) 01.06.05 _ L000 .1695):400, Ta 1309 e159 ANS. ‘Note:The es ough prot der ena oon. Might baat hp spend ie (eawestons th you oulhe mow Hel seed in dng 14) Namentor ag ng) = alt +409 = th Denaminee:159 = 93 Tue (=1 ina oyn logy Git 0og~Hpe sf sm- BD Tei) bsigeadyt Doig a 18 ong 25, LTS teniomne 729% ANSE) 6 iggy, XARA DA ANS AD Cee 0201 A, eton 2+(e) ois om 100 (104 $8) = 1275 128 oye 201 ASM ihn83d. 4, Atul son Any Due or Paing"Nowyou seit." Annuity Values on Any Date (or Playing “Now you see it... ”) Conse ie ong ses of pment: Les termine th ve thes 7 payments vais es ‘Acosines2, 3,910, cary the aes cine expres ing yb we defined ein tiseaper eign tga “Theis mo fr hi kind feed anu soy We ci ep sb (les “co oume’, ry what yt oo ap of eect sea-ice or ea Tas py an a= 31 ow onan ti amy Aner COU Sa ig We coud alo determine he prs val by plying “New you see." Pace wo Bsa payments on becioram ad mmedinly wth hem oo “The PV oft payments hein ine cng fou ones a Boise tie Po be fitons emetic Th cP af is efeed any sap deePasaime ned (Noe th te i yet sae m+) Tasty ead be Sse 2 amin Degen defend yen ayo. Weave lon =nailie= Men= in om Conse he AV the pies time 12 Te we mest conan meted iain i one 0201 ASN etn 129§3e, 130 Ave d+geag eet sscand mod edo pie “noW J se ‘There no pci stl et AV. ‘Now conse ae hese payments asf ine 6 Wesoudexpessitas any ofthe pelos ‘aerated or dace tne 8 Peeps be met xeon ate ‘This vae ould be expressed es (+a many efor, AShort-Cut Method for Annuities with “Block” Payments ‘Shortt Alert ‘Ts secon stows two rail we downthe alo sn arty wih ek” payne, nanny which apy whch cade ced hy Popet — note wer, ayes ue eel ora eat yeas en change ater el fo ander For exam cmsie flowing iy wih ck payments 55 othe fie 8 yas 12 ‘Seen 7 year SOfor de et yee aa 1 foe wt a ee a ‘We i am mil ite down the PV (or AV) of an ety Hi ely oe the paymens ‘The Long Woy Bef we lee sant mt si ya mor deer ed owt me We wit ‘nee Sky FV otra payers: Seq PV ove? pymens>—2arg— a9) PVotvext7paens: 109 ~ em) PVotvetGpamens: 4059 ~om){e, A Shan-Cu Met fr Anais Wilk” Payments Ang pl oe pac ves, combining ems ad wing in deeadig oder of he prod PY = Seg Sy +25 og “The Short Way “Thess (1) Sst ih he paymet es rom he comparison dae (2 make asmens (Gls oc mins) ou movein Ser tothe compara ne (eeftloning exopionay sem ogra "oe wah ts tat ene youprace ‘Te you can ote otk payments nd wee Pn Single frm in 104 13 sas) ‘We wat be PY, ote comparion dt tine. We an withthe ote payment (SS ine ‘hinge Tir err a ine hen payments dere br 35 (os 818 810. we Sey We ren chon oe ter ange =15, when pes ices by 3 (om s10 {8120 ewe ar. Flybe st stnge atin 8a deena of (om 8121035), power Panga hi tpt, eve PV tSes~ Sey 20m— Tog Wha we fave just one os wih eel nmi 15 po Te Pome Tel $s Hew ss 241020 $0 Sing wit se pyre S20 ime 50 and aking the seca june as we move PY wg ~ Bay Agog Accumulated Vale ‘The AV of sms withlock pyres isbn che same my ah PV. For example onsets ja bore The spar sine 30K we at te AV oe data the nt pment owe at ie fret payment om ie 30 which 33 ie We Inenedily we Soy Ar we move toward he copa ne fe 30, nee the et ‘hang smn (am $510 $8) aie 159 or nment = y. (20 "te pm of payment we mast incre by 32, Ue payer rom Une II tine 0, ‘lave or 3-10 payne The rest hanger an nae of rom 80 12) aie 9. ‘othe ame arm ty, Pel payments cease Sam S121 520) ie 285 Copp 0201 AS ee 131§3f. 12 ‘he avamentem is Pong ital ogee Ava Sig teat dey ‘Wolter vue tie and de sccm von he dh ft payment {elongates eT Tine Pamet Tine Pome oS Te 8 61210 ues 0 bes wen 10 eno Bes 12 “pao A PV = Woe Sra + Sg S09 A aii Seat AV egg B+ 10m 42 Perpetuities Perptuty-Inmediate ‘Conde an symm wih an poymens of $1.0 whee te payments conine fr Sih ey ced retin i ane mh ea a oe ions wien ‘We oul aba five demi he iby smaing the ite seam propo: Sn nei way odie tei so we 2 ver crpliaon pene eaong" 2 {ais aepost 5 Din atk ing ners ete Ks ct cul with tthe eno each yareverandabsy hy he egal po. Te $0 ded Cot 07011 ASA a15t Ppeniin ¢ Jeelitepopslylamedac viheanlpgeenceetinies mot ea=} Iridnly, mean we he PV aa eps oder the fom y= 1 by pling "Now ypevmetss Ne woud ihe to demne be PY a be llovng payment esp feos payment ne + +2) fee armed with hem “Te ayn shove hein ie nate iu ney form 3 eerie, ‘rth Pvef Butte PV ever by be PV of no yen, eh fm an mys fered peety-immesin. The PY oii fered erp" (}) Tas wee: € acte() Perpeity-Due A peretity-o.90 perma eis wth payment of 1.0 td an omnes foe fa tn tn eva Amie sprath so see at 2 perp dee rides $1.00 dy pt easy the sme ‘Sie i exces om by he fin pyet of 1.0, wean this wy Cored O70 ASM, fon 133134 We cond sient in Sao ne. Now you can ie i er epson ‘BAMPLE ADAP) ‘deh ont ona le src pe one inane of te allowing Bre way: (A pepe oF 250 a he en of exch mond {a $798 70a1 eens a each mofo yes (i On pyre S007 teen yes ‘teach ayment mend roche sae peel ab fr the deh nel, the rset A300 (55400 CHAL3H0 yERAM (E)TESO Letj= monly fleave te oimee From and ae ane: 230) = 9510 G==¥Y 2 587079570 81 Fromiiive hive PY ode ne =a, 070, om Ee = 88 #55 ANS. (8)Summary of Cerys Formalin econo 3 Summary of Concepts and Formulas in Sections 3d to 3f (0) The PV of nme dfredsniy-mednte wn pymens dean oan erm —on (2) Thermo forthe fered sayin (Hean aoe wen: alfa (0) The PV of an ana with nk payment” can wet ery chy ysing withthe Frye ata rime compe dn td ming susie (il ria 800 ove coset (ee Scio for exampes) (©) The PV ofa pores (0) The PV of pepsi ue is (6) ThePV ot ape excendsthe PV optimise bye pay Cope 02011 Aeon as83). Varying Interest When then te ones varies owt em of anne ings can gta hy. Conse te olloweg wo examples shih are worded sia hve diflere asvers Aol dps 100 made atte ein of ach year or 10 yeu Find he acumaad ‘oleate edt 10searithe fete of mere fort i 8 yer an othe “The is 6 depss he an AV time 6 tig = 579228. Akime he AV i292 28.078 1s GBRSE Te ku 4 depts hve an AV te 10 1g = SSO. Te al A= susinss (1) Teal AV cua wien 1+ ip, (2) Ween eplay"Now ousel vide rpms ei AV atte 1camar be expe 10 y= Fp) Tisenpesion, heh seule 10 (1.0% peste pat am 7 rn th yc hen hy aly ea ‘Arnal depsi of $100 ae made he ing of ech year for 1 yer Pinte ccd “The wrdngof Example lsusatthe it depen cam 8% fo eee 1e eid (no inte year Ths, the AV sale hghertan he AV a Example. The AY of 10 (108+ 0g |The et ter coal bere 0G By yg) _Asexpecte is AV is higher han te AVia Beare Aver ye fying inte i whe te evicting thf ees funciona Seton fg coer emp i Cerra 0201 ASM etn 1sseevon Bake Armas ‘Summary of Concepts and Formulas in Sections 3) cag wry met Pere t,t xl esc we rs a ‘tei: ade st eoe estoeldie oe aeisnon toe 0) Forngaie so edie nut ace fSerdaett dt nceenconata ce Pa a Bias tag eee ee eee ee ere 0) P= ea eae 166 ‘Cnyhgk0 201 ASH, ion