I would like a lecture videos in depth covering these two topics
Chapters 17 and 23.
The syllabus is not quite the same as yours, so exercise care.
An individual is to receive an annuity of $5000 for ten years,at the end of each year.The present value of the annuities is $33,550. What is the cost of capital(r)?
a) 2%per annum
b) 4% per annum
c) 8%per annum
d) 16%per annum
33,550 = 5,000 x cumulative 10 year discount factor at the cost of capital (CDF)
CDF = 33,550/5,000 = 6.71
So look at your 10 year annuity/cumulative d/c factors until you find 6.71 and read off the discount rate.
This is so fascinating.
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