1. 12 Further mathematics
Perpetuities

2. Perpetuities
An annuity will earn interest after every compounding period. If the payment received after each compounding period is smaller than this interest, the annuity will continue to grow. If the payment received after each compounding period is larger than this interest, the annuity will decay until nothing is left.
If the payment received is exactly the same as the interest earned in one compounding
period, the annuity will maintain its value indefinitely. This type of annuity is called a
perpetuity. Payments of the same amount as the interest earned can be made in perpetuity, or forever. Perpetuities have exactly the same relationship to annuities as interest-only loans have to reducing-balance loans.

3. Perpetuities

4. Perpetuities

5. Perpetuities

6. Perpetuities

7. Perpetuities

8. WORK TO BE COMPLETED
Exercise 9F All