Question
On January 1 , Alex received an inheritance of a thirty-year annuity. Starting on the day of the inheritance, the annuity pays$1,000each January1,$2,000each April1,$1,500each July
On January 1 , Alex received an inheritance of a thirty-year annuity. Starting on the day of the inheritance, the annuity pays$1,000each January1,$2,000each April1,$1,500each July 1 , and$5000each October 1.
Required
(a) Using i=5%, calculate the value of this inheritance on the day Alex inherits it.
(b) If the value on the day she inherits it is $140,000, find the annual effective rate i used to calculate this value to the nearest hundredth of a percent.
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South Western Federal Taxation 2017 Comprehensive
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