A 4-year decreasing annuity has 1st payment of $1000, and each subsequent payment is $200 lower than the previous payment (paid at the end of each year). Apply the 1st order modified approximation to estimate the annuity price when the annual effective interest rate decreases from 2.5% to 2% (keep 2 decimal places in your answer).

A 4-year decreasing annuity has 1st payment of $1000, and each subsequent payment is $200 lower than the previous payment (paid at the end of each year). Apply the 1st order modified approximation to estimate the annuity price when the annual effective interest rate decreases from 2.5% to 2% (keep 2 decimal places in your answer).

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 18P

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