A rich aunt has promised you $3,000 one year from today. In addition, each year after that, she has promised you a payment (on the anniversary of the last payment) that is 2% larger than the last payment. She will continue to show this generosity for 20 years, giving a total of 20 payments. If the interest rate is 6%, what is her promise worth today? The present value of the aunt's promise is $. (Round to the nearest dollar)
A rich aunt has promised you $3,000 one year from today. In addition, each year after that, she has promised you a payment (on the anniversary of the last payment) that is 2% larger than the last payment. She will continue to show this generosity for 20 years, giving a total of 20 payments. If the interest rate is 6%, what is her promise worth today? The present value of the aunt's promise is $. (Round to the nearest dollar)
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications
Section: Chapter Questions
Problem 13E
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Question
![A rich aunt has promised you $3,000 one year from
today. In addition, each year after that, she has promised
you a payment (on the anniversary of the last payment)
that is 2% larger than the last payment. She will continue
to show this generosity for 20 years, giving a total of 20
payments. If the interest rate is 6%, what is her promise
worth today?
The present value of the aunt's promise is $
to the nearest dollar)
(Round](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F16839d57-bd94-4627-81ab-d459064bfd5e%2Fcb2bc700-e137-4c26-81d5-a8435ce1dce4%2Fvmv7t9l_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A rich aunt has promised you $3,000 one year from
today. In addition, each year after that, she has promised
you a payment (on the anniversary of the last payment)
that is 2% larger than the last payment. She will continue
to show this generosity for 20 years, giving a total of 20
payments. If the interest rate is 6%, what is her promise
worth today?
The present value of the aunt's promise is $
to the nearest dollar)
(Round
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