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Mathematics, 26.08.2021 23:00 mambaout

Please help me a. determine the most cost effective way to pay for an asset from 3 payment arrangements: Option 1- R15 000 per month for 10 years. Option 2- R14 850 per month for 10 years starting from today. Option 3- A lump sum payment of R3 500 000 at the end of 10 years. If interest is 12%, which option is the most cost effective?

b.) What is the present value of a R2500 annual perpetuity that starts at the end of 4 years if interest is 5%? Draw a timeline as part of your solution. ​

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