How much should you pay for an annuity of k1, 000 a year pay

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Question: New members of a club are admitted at the start of each year and pay a joining fee of K2, 000. Henceforth members pay the annual subscription of /400, which falls due at the end of each year. How much does the club earn from a new member over the first 10 years, assuming an annual interest rate of 5.5%. How much should you pay for an annuity of K1, 000 a year payable in arrears for 20 years, assuming an interest rate of 6%, if you are to break even? How much should you pay for an annuity of K1, 000 a year payable in arrears quarterly for 20 years, assuming an interest rate of 6% per annum.

Reference no: EM133401694

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