Don purchases an annuity that will make payments starting in 6 years that increase by $100 each year. The first payment will be $2,000. To calculate the present value of the annuity at the time of purchase, when discounted at an annual rate of 5.5%.
7 Don purchases a 20 year annuityimmediate evaluated at a.pdf
1. 7. Don purchases a 20 -year annuity-immediate evaluated at an annual effective rate of 5.5%. The
first payment will be made at the end of year six in the amount of 2,000. The subsequent
payments increase by 100 each year. Calculate the present value of the annuity at purchasing.