Find the value of the annuity

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Reference no: EM131319957

1. An eighteen year old receives an annuity on her birthday from her great uncle's estate paying 3,000 on her nineteenth birthday and subsequent payments that increase by $500 per year until age thirty-five. Find the value of the annuity on her eighteenth birthday assuming an interest rate of 7.25% compounded monthly.

(A) 53,352 (B) 55,241 (C) 58,071 (D) 59,299 (E) 62,789

2. Perpetuity has a payment of 10 starting today, 10+X in one year, 10+2X in two years, 10+3X in three years, and so on. Assuming an effective annual rate of 6%, the perpetuity can be purchased for 3,000. Find X to the nearest dollar.

(A) 8 (B) 9 (C) 10 (D) 11 (E) 12

Reference no: EM131319957

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