Ile | E:/SEMESTER%2002/BASIC%20FINANCE/PD F/Time%20value%20of%20money%20Part% 2011.pdf Additional Questions
3. Mr. Emerson wishes to purchase an annuity contract that
will pay him, Rs.7000 a year for the rest of his life. The Sri
Lanka Insurance Corporation figures that his life expectancy is
20 years. The company imputes a compound annual interest
rate of 6% in its annuity contracts.
How much will Emerson has to pay for the annuity?
b. How much would he have to pay if the interest were 8%?
a.
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