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Mary is to receive an annuity with 30 annual payments. The first payment of $1,000 is due immediately and each successive payment is 5% less than the payment for the preceding year. Interest is 12% compounded annually. Determine the present value of the annuity. O a. Atleast $6,600, but less than $6,700 O b. At least $6,500, but less than $6,600 O c. At least $6,700 O d. At least $6,400, but less than $6,500 Oe. Less than $6,400

Mary is to receive an annuity with 30 annual payments. The first payment of $1,000 is due immediately and each successive payment is 5% less than the payment for the preceding year. Interest is 12% compounded annually. Determine the present value of the annuity. O a. Atleast $6,600, but less than $6,700 O b. At least $6,500, but less than $6,600 O c. At least $6,700 O d. At least $6,400, but less than $6,500 Oe. Less than $6,400

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Mary is to receive an annuity with 30 annual payments. The first payment of $1,000 is due immediately and each successive payment is 5% less than the payment for the preceding year. Interest is 12% compounded annually. Determine the present value of the annuity. O a. At least $6,600, but less than $6,700 O b. At least $6,500, but less than $6,600 O c. At least $6,700 O d. At least $6,400, but less than $6,500 O e. Less than $6,400
Transcribed Image Text:Mary is to receive an annuity with 30 annual payments. The first payment of $1,000 is due immediately and each successive payment is 5% less than the payment for the preceding year. Interest is 12% compounded annually. Determine the present value of the annuity. O a. At least $6,600, but less than $6,700 O b. At least $6,500, but less than $6,600 O c. At least $6,700 O d. At least $6,400, but less than $6,500 O e. Less than $6,400
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