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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