| Time value for money question |
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| Written by Wilfred Ling | ||||||
| Sunday, 18 May 2008 | ||||||
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Question: If you invest into something that cost $100,000 and wait for 10 years, your initial capital grows to $150,000 and than on the 11th year you'll get 4% of this $150,000 (or $6000) every year for the next 25 years (after which there is nothing to take back). How much is the return of your investment? Answer: 1.9% per annum Question. Say you get 30 years of $6000 each year but everything else is the same, what is the return? Answer: 2.53% per annum Question: Say you get 40 years of $6000 each year but everything else is the same, what is the return? Answer: 3.25% per annum Question: Say you get 50 years of $6000 each year but everything else is the same, what is the return? Answer: 3.62% per annum. Therefore, I appeal to all financial advisers always do their homework. Most financial advisers will know what I am trying to say.
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