Math finance question on Varying Annuities with Payments at a Different Frequency than Interest is Convertible
On his 65th birthday, Smith would like to purchase a tenyear annuityimmediate
that pays 6000 per month for the first year, 5500 per month for the second
year, 5000 per month for the third year, and so on. Using an annual effective
interest rate of 5%, how much will Smith pay for such an annuity?
This is a good resource https://archive.org/details/theoryofinterest00kell/page/1/mode/1up?view=theater
Markgvanzalk
96
Join Matchmaticians Affiliate Marketing
Program to earn up to a 50% commission on every question that your affiliated users ask or answer.
 answered
 513 views
 $12.00
Related Questions
 Optimal Control  Calculus of Variations
 Internal Rate of Return vs Discount Rate
 Finding Probability Density Function of a Standard Brownian motion: Conditioning for two different cases
 Kelly Criterion for an example
 Finance question with bonds
 Year 12 Finance  Combining Superannuation and withdrawals

You are given:
(i) X is the current value at time 2 of a 20year annuitydue of $1 per annum.
(ii) The annual effective interest rate for year t is (1/(8+t)).
Find X.  Contract Crediting Rate Formula