Capital Theory Problems

Question 7 Answer

Annuity Portion:

TABLE 11 - 3

(N = 8, 1 = 4%) = 6.7327

$1000 x 6.7327 = $6732.70

Lump Sum Portion:

TABLE 11 – 2

(N=3, I = 4%) = .8890

$6732.70 x .8890 = $5985.37