hi John, I now know the answer no need to reply, if the perpetuity is paid immediately then we add the initial payment but if it is paid in 1 year’s time then we dont add it on. Thank you

hi John, on the perpetuity question in the mock exam, $41667 do you add the 5000 on top or just $41667 is the correct answer. I have seen the mock question which appears to add the investment amount.

Sir, I wonder if you deposit $41667 in ex-wife鈥檚 account so as to fulfill the condition of $5000 a year, then she will receive both principal $41667 and interests $5000. Why don鈥檛 u keep it in your account and just give interests to her each year despite you don鈥檛 want to make contact.

I mean using above method, she will be received beyond the condition, which is just $5000 a year.

Hello John thank you for the lecture, have you ignored the Advanced annuities and perpetuities (Some regular cash flows may start now (at T0) rather than in one years’ time (T1). and Annuities/Perpetuities in arrears (Some regular cash flows may start later than T1). or they are out of exam syllabus? Please kindly clarify!

Hi John, I wanted to know if we can find example no 8 through the formula for present value or can we only solve this example using the present value annuity table.

In the formula,what value will we take for number of years.Will it be 9 or 12? Because I don’t seem to be the getting the answer using either of it as number of years in the given formula.

You use the annuity factor for 12 years less the annuity factor for 3 years – just as I explain in the lecture.

Whether you get the factors from the tables or you calculate them yourself using the formula doesn’t matter, but it is ridiculous to use the formula when you are given the annuity table in the exam.

It depends on what calculator you have. It will explain in the manual (and if you have lost the manual then you can find it by typing the model number into Google).

However, for 4 years at 10% it makes more sense to use the tables provided in the exam anyway (and I explain how to use the tables in the lectures).

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artipha says

hi John, I now know the answer no need to reply, if the perpetuity is paid immediately then we add the initial payment but if it is paid in 1 year’s time then we dont add it on. Thank you

John Moffat says

Correct 馃檪

artipha says

hi John, on the perpetuity question in the mock exam, $41667 do you add the 5000 on top or just $41667 is the correct answer. I have seen the mock question which appears to add the investment amount.

kevinc19 says

Sir, I wonder if you deposit $41667 in ex-wife鈥檚 account so as to fulfill the condition of $5000 a year, then she will receive both principal $41667 and interests $5000. Why don鈥檛 u keep it in your account and just give interests to her each year despite you don鈥檛 want to make contact.

I mean using above method, she will be received beyond the condition, which is just $5000 a year.

John Moffat says

I did not say that I would put the money in her account. I would put it in a separate account which would generate the interest for ever.

rahmatbakhshi says

Hello John thank you for the lecture, have you ignored the Advanced annuities and perpetuities (Some regular cash flows may start now (at T0) rather than in one years’ time (T1). and Annuities/Perpetuities in arrears (Some regular cash flows may start later than T1). or they are out of exam syllabus? Please kindly clarify!

Bebo15 says

Can someone send me the table for discounted factor ?

John Moffat says

The tables are printed in our free lecture notes (you can download the notes free of charge).

Khaula says

Hi John, I wanted to know if we can find example no 8 through the formula for present value or can we only solve this example using the present value annuity table.

John Moffat says

You can do it either way, but it is obviously quicker to use the annuity tables when it is an equal cash flow each year.

Khaula says

In the formula,what value will we take for number of years.Will it be 9 or 12?

Because I don’t seem to be the getting the answer using either of it as number of years in the given formula.

John Moffat says

You use the annuity factor for 12 years less the annuity factor for 3 years – just as I explain in the lecture.

Whether you get the factors from the tables or you calculate them yourself using the formula doesn’t matter, but it is ridiculous to use the formula when you are given the annuity table in the exam.

perrettjoseph says

I have no idea how to write 800 X 1/(1.1)to the power of 4 in a calculator. What am I missing?

John Moffat says

It depends on what calculator you have. It will explain in the manual (and if you have lost the manual then you can find it by typing the model number into Google).

However, for 4 years at 10% it makes more sense to use the tables provided in the exam anyway (and I explain how to use the tables in the lectures).