Question

A 30-year annuity has end-of-month payments. The first year, the payments are $120 each. In subsequent years, the monthly payment increases by $5 over what it was the previous year. Find the accumulated value of this annuity if AEIR = 3%. A. 84,820 B. 42,390 C. 105,070 D. 100,620 E. 41,560

Name: a 30 year annuity has end of month payments the first year the payments are 120 each in subsequent years the monthly payment increases by 5 over what it was the previous year find the accumu 76676
Uploaded: 2022-11-05T11:48:48-08:00
Duration: 4 min 57 s
Channel: Qudsiya Anis
Description: a 30 year annuity has end of month payments the first year the payments are 120 each in subsequent years the monthly payment increases by 5 over what it was the previous year find the accumu 76676

          A 30-year annuity has end-of-month payments. The first year, the payments are $120 each. In subsequent years, the monthly payment increases by $5 over what it was the previous year. 
Find the accumulated value of this annuity if AEIR = 3%. 

A. 84,820 
B. 42,390 
C. 105,070 
D. 100,620 
E. 41,560

Added by Thomas K.

Elementary Statistics a Step by Step Approach

Allan G. Bluman 9th Edition

Instant Answer

Solved by Expert Qudsiya Anis

11/05/2022

Step 1

Given: - First year payment (P) = $120 - Increase in payment per year (Q) = $60 - Number of years (n) = 30 - Annual effective interest rate (AEIR) = 3% Using the formula for present value of an annuity: \[ PV = P - Q \times \frac{1 - v^n}{i} \] Substitute the Show more…

Show all steps

Thanks for your feedback!

A 30-year annuity has end-of-month payments. The first year, the payments are $120 each. In subsequent years, the monthly payment increases by $5 over what it was the previous year. Find the accumulated value of this annuity if AEIR = 3%. A. 84,820 B. 42,390 C. 105,070 D. 100,620 E. 41,560