Jon is to receive 10 annual payments where the first payment of 10,000 will be paid in one ye Payments in years 2-10 will increase by an annual rate of 5%. The present value of these payments using an annual effective interest rate of 8% is X. Calculate X. A 78,380 B с D E 81,836 85,928 88,382 183,200

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A:

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Q: Raghubhai

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Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.