Jean-Rene wants to make a lump-sum deposit today such that at the end of every three months for the next five years he can receive a payment starting at $2,500 and increasing by 1% each time thereafter. At the end of the term, an additional lump-sum payment of $10,000 is required. If the annuity can earn 8.75% compounded semi-annually, what lump sum should he deposit today?

Answer rating: 100% (QA)

To solve this problem we need to find the present value of the annuity payments and the lumpsum paym... View the full answer