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1. a) A growing annuity will make payments for 25 years. The next payment is $4. Payments grow at 1% a year. The discount rate
1. a) A growing annuity will make payments for 25 years. The next payment is $4. Payments grow at 1% a year. The discount rate is 5%. What is the present value? b) An annuity offers 26 payments of $5/year. However, annuity starts with a 4 year delay such that first payment is in 5 years. How much is the present value? (R=7%) c) An annuity pays $5/year for 7 years except no payment in year 6. If R is 12%, what is the present value?
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