1. A 20-year annuity immediate pays 2000 for the first year. In each subsequent year, cach payment is increased by $300 over the payment from the previous year. The nominal annual interest rate is 18% convertible monthly. Calculate the present valuc of this annuity.

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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1. A 20-year annuity immediate pays 2000 for the first year. In each subsequent year,
each payment is increased by $300 over the payment from the previous year. The
nominal annual interest rate is 18% convertible monthly. Calculate the present value
of this annuity.
2. The present value of 10-year annuity immediate with level payments and effective
annual interest rate i is X. The present value of 20-ycar annuity immediate with
the same payment and interest rate is 1.5.X. Find i
Transcribed Image Text:1. A 20-year annuity immediate pays 2000 for the first year. In each subsequent year, each payment is increased by $300 over the payment from the previous year. The nominal annual interest rate is 18% convertible monthly. Calculate the present value of this annuity. 2. The present value of 10-year annuity immediate with level payments and effective annual interest rate i is X. The present value of 20-ycar annuity immediate with the same payment and interest rate is 1.5.X. Find i
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