Question: An n-year annuity-immediate has a payment of k 2 at time k, k {1, 2, ..., n}. Derive a formula for the present value of

An n-year annuity-immediate has a payment of k 2 at time k, k {1, 2, ..., n}. Derive a formula for the present value of this annuity in terms of the symbol (I3,2a)n2 i , assuming money grows according to the accumulation function a(t) = (1 + i) t . Evaluate numerically if n = 30 and i = .04. [HINT: a 2 b 2 = (a b)(a + b).]

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