Further analysis of Problem 11.

price changes

a. Find the present value of 2 percent X $1,000 (or $20) for 20 years at 10 percent. The $20 is assumed to be an annual payment.

b. Add this value to $1,000.

c. Explain why the answers to problem 12h and problem 11 are basically the same. (There is a slight difference due to rounding in the tables.)