Yianni has funds in his superannuation account and is, Ask an Expert

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Yianni has funds in his superannuation account and is considering purchasing a pension.

In exchange for a lump sum payment now, Polysuper offers an annual pension over twenty years beginning with a payment of $61,000 at the end of the first year.

There are twenty payments in total and the payments will increase at an annual rate of 2.5%pa.

The appropriate opportunity cost of funds is j_2 = 9%pa what is the amount of the lump sum needed today to purchase this pension?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M93051356

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