Lucy received a twenty-one-year annuity as a gift on the day of her birth. The annuity pays $500 on her odd-numbered birthday and $700 on her even-numbered birthday.

If the nominal interest rate is 8% payable monthly, find the value of this annuity on the day of your birth.

Next, if the value of the annuity at the time of your birth was $6,000, find the annual effective discount rate as a percentage, accurate to the nearest hundredth of a percent.

Answer rating: 100% (QA)

To find the value of the annuity on the day of Lucys birth we can use the formula for the present va... View the full answer