Question
Johnny owns an annuity that provides him with payments at the end of every two months, beginning on February 28, 2010. The first three payments
Johnny owns an annuity that provides him with payments at the end of every two months, beginning on February 28, 2010. The first three payments are $75 each, the next six payments are $50 each, and the last three payments are $25 each. Assume that the interest rate is i(6) = 12% throughout the term of the annuity. After the final annuity payment, the interest rate changes to i(6) = 8%. Find the value of the annuity on June 30, 2013.
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