What is the multiplier used in calculating the capital value of an annuity?
Alberta, Canada
The following excerpt is from Kwong Estate v. Alberta, 1978 ALTASCAD 403 (CanLII):
It is a rough and ready tool. Its use is admirably explained by Lord Diplock in Mallet v. McMonagle (supra) at 177, where Lord Diplock says that a multiplier of 16 "represents the capital value of an annuity certain for a period of 26 years at interest rates of 4 per cent, 29 years at interest rates of 4 1/2 per cent or 33 years at interest rates of 5 per cent ---". The capital sum would be exhausted at the end of the period.
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