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)

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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.