Chap. T\'. COMPOUND INTEREST.

1105
Example.
An annuity of 40/. is to commence 20 years hence, and is to continue 30 years ; required
its present value, the rate of interest being 4 per cent.
Under 4 per cent, and opposite to 20 is - - - - - 13 590.(26
Under 4 per cent, and opposite to 50
(20+30)
is - - 21 -482184
Difference
^
-
-
- 7-89185of
Annuity given - - -.- - - -
--
40;
315-674320
or 315/. I:3.-i.
5tW.
Table Fifth contains the annuity which 1/. will purchase, compound interest being
allowed. The manner of using this table is obvious, from what has been said relative to
the preceding tables.
Example.
What annuity for 10 years will 500/. purchase, the rate of interest being 5 per cent.?
Under 5 and opposite to 10 is- - - - - - - '129504 -
Principal given
.........
500
64-752000
or 64/. 15s.
0^.
Tables Sixth, Seventh, and Eighth are for finding the value of annuities on single and
joint lives, and were constructed by Simpson, on the London bills of mortality.
To find the value of an annuity for a single life, at a proposed rate of interest, within the
limits of the table, take from Table VI. the number answering to the given age and proposed
rate of interest, which multiplied by the given annuity, the product will be the value re-
quired.
Example.
What is the value of an annuity of 50Z. upon a single life aged 40 years, according to the
London bills of mortality, the rate of interest being 4 per cent. ?
The value of an annuity of 1/. for 40 years at 4 per cent, is . - 1 1
-5
Annuity
. - . - - - - - -- - 50
Value
- 575
To find the value of an annuity of two joint lives, multiply the number in Table VII.
answering to the given ages, and at the proposed rate of interest, by the given annuity, and
the product will be the required value.
Example.
What is the value of an annuity of 60/. for two joint lives, the one being 30 and the other
40 years, interest at 4 per cent. ?
The number answering to 30 and 40 years at 4 per cent, is
- - -
8-8
Annuity
..-.--.-.--
60
Value
5-'80
To find the value of an annuity for the longest of two given lives, proceed as directed in
the case immediately preceding, but using Table VIII., and the product will be the value.
Example.
What is the value of an annuity of 60/. for the longest of two lives, the one being 30 and
the other 40 years, interest at 4 per cent
The tabular number answering at 4 per cent, is
...
-
15-9
Annuity
......--_-.
60
Present value - .
- - - - - - - - 954()
The first five tables which follow are printed from those of Smart; the remainder are
from Simpson.
Tiie calculations involving the valuation of annuities on lives are not very frequently ini-
! posed on the architect, but it is absolutely necessary he should be capable of performing them,
i
as in the case of valuations of leases upon lives, which sometimes occur to him.
4 B