You Are Considering an Investment in a 40-Year Security

Multiple Choice

You are considering an investment in a 40-year security.The security will pay R25 a year at the end of each of the first three years.The security will then pay R30 a year at the end of each of the next 20 years.The simple interest rate is assumed to be 8 percent, and the current price (present value) of the security is R360.39.Given this information, what is the equal annual payment to be received from Year 24 through Year 40 (i.e., for 17 years) ?

A) R35
B) R38
C) R40
D) R45
E) R50