Extra Problems 3 a

Extra Problems 3 a - t is & t = : 005 = (1 + :...

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ACTSC 231 Extra Problems 3 a 1. Find the P.V. of an annuity which pays continuously at a rate of $300 per year for 6 years if: (a) = 4% (b) i = 4% (c) i (4) = 4% (d) d = 4% (e) t = : 005 1+ : 01 t 2. Calculate the present value of an annuity payable continuously for 10 years, under which the rate of payment at time t is 400 + t per year, and where the force of interest at time
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Unformatted text preview: t is & t = : 005 = (1 + : 0025 t ) . 3. Find the present value of a dividend paying stock. Assume: (a) that dividends are paid annually, (b) the next dividend is $5 and is paid one year from now, (c) that dividends increase every other year by 2%, (d) and that the annual e/ective rate of interest is 5%. 1...
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This note was uploaded on 02/07/2010 for the course ACTSC 231 taught by Professor Chisholm during the Spring '09 term at Waterloo.

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