Consider the three 20-year annuities described below: (1) level payments of £1,000 payable annually in arrears (i) increasing payments made annually in arrears, where the first payment is £1,000 and...

Extracted text: Consider the three 20-year annuities described below: (1) level payments of £1,000 payable annually in arrears (i) increasing payments made annually in arrears, where the first payment is £1,000 and the payments increase by 10% pa compound each year thereafter (iii) continuous payments at the rate of £1,000 pa over the 20 years. Calculate the discounted mean term of each annuity using an interest rate of 10% pa effective.