An annuity makes continuous payments for 12 years. The payments increase for the first 6 years and decrease for the final 6 years. The annual rate of payment at time t is: 10t 0≤ t ≤ 6 10(12-t) 6 < t≤ 12 The annual effective rate of interest is 6%. Calculate the present value at time t = 0 of the annuity. Solution:
An annuity makes continuous payments for 12 years. The payments increase for the first 6 years and decrease for the final 6 years. The annual rate of payment at time t is: 10t 0≤ t ≤ 6 10(12-t) 6 < t≤ 12 The annual effective rate of interest is 6%. Calculate the present value at time t = 0 of the annuity. Solution:
College Algebra
7th Edition
ISBN:9781305115545
Author:James Stewart, Lothar Redlin, Saleem Watson
Publisher:James Stewart, Lothar Redlin, Saleem Watson
Chapter8: Sequences And Series
Section8.4: Mathematics Of Finance
Problem 2E
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