2) An annuity has an effective interest rate of j = 2% per period for the first 30 periods, then has an effective interest rate of j = 3% for the next 20 periods. Payments at the end of each period are $500 for the first 40 periods and then $400 for the next 10 periods. Find the present value.

Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter19: The Basic Tools Of Finance
Section: Chapter Questions
Problem 1CQQ
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2) An annuity has an effective interest rate of j = 2% per period for the first 30 periods,
then has an effective interest rate of j = 3% for the next 20 periods. Payments at the end of
each period are $500 for the first 40 periods and then $400 for the next 10 periods. Find the
present value.
Transcribed Image Text:2) An annuity has an effective interest rate of j = 2% per period for the first 30 periods, then has an effective interest rate of j = 3% for the next 20 periods. Payments at the end of each period are $500 for the first 40 periods and then $400 for the next 10 periods. Find the present value.
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