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Return of capital sinking fund

logicandtruth

New member
Dec 14, 2016
7
Hi All - Would appreciate some help on this please.

Query on level annuities

Q. What is the present value of an investment with an annual income of £10,000 over the next for years at a return of 5% per annum?

A - first image below. I appreciate that the second equation though gives the same correct answer of £35,460, it would be used if the remunerative and accumulative rates were different.

1637059476199.png

The below image provides a return on and of capital broken down year-by-year. Please could you advise how the figures in the column titled 'return of capital (sinking fund)' are calculated

1637059422724.png