1. (a) What is the largest monthly payment, to be paid at the end of each month, that we can get from perpetuity with an initial

Question

1. (a) What is the largest monthly payment, to be paid at the end of each month, that we can get from perpetuity with an initial deposit of $20,000 that earns 4% p.a. compounded monthly? Give your answer rounded to the nearest cent.
(b) If the first payment is deferred by 12 months, the what is the largest monthly payment from this perpetuity? Give your answer rounded to the nearest cent.
(c) What per annum nominal interest rate with interest compounded monthly would be needed to achieve payments of $100 at the end of every month if the initial investment is $20,000?

Kunduz · Accepted Answer

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