Mathematical Techniques for Accountant questionsWatch
2. (a) Find the daily rate of interest paid (to 6 dp) if a building society pays customers an AER of 2.71 % on a savings account (5 marks)
(b) How much would an amount £28,000 accumulate to if it was left in this account for 122 days? (5 marks)
3. If the market interest rate is 3.1% how much would you expect to pay for :
(a) an annuity which guarantees to pay you £12,000 annually for the next 20 years ? (5 marks)
(b) a perpetual annuity which will pay the same annual amount as in (a) ? (5 marks)
If someone has saved £ 287, 000 to buy an annuity when they retire,
(c ) what annual income could they expect if they bought an annuity that paid out for 20 years , given the above interest rate?