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Financial Maths - Series - Annuities - Fund withdrawal.
Test Yourself 1 - Solutions.


 

Number of withdrawals. 1. (i)

(ii)

(iii)

 

2. (i)

(ii)

(iii)

Withdrawal amount.

3. (i)

(ii)

  4. (i)

(ii)

Changing the rate of withdrawal by a % amount. 5.(i)

(ii)

(iii)

(iv)

Changing the rate of withdrawal by a % amount.

6. (i)

(ii)

(iii)

(iv)

(v)

Amount to invest.

7. (i)

(ii)

 

8. (i)

(ii)

 

9. (i) .

(ii) The amount remaining after the third prize is awarded is the same as the original deposit. Hence the interest received each year equals the amount of the prize.

As long as these two amounts continue unchanged, the prize can be awarded in perpetuity.