Question: Smith, age 6 5 , is evaluating three temporary life annuities, each of which provides annual payments. For each annuity, the last payment is made

Smith, age 65, is evaluating three temporary life annuities, each of which provides annual payments. For each annuity, the last payment is made at age 75. The first annuity pays $5,000 at age 66; subsequent payments decrease by $500 per year. The present value of this annuity is $14,000. The second annuity pays $1,000 at age 65; subsequent payments increase by $1,000 per year through age 75. The present value of this annuity is $21,000. The third annuity pays $1,000 each year beginning at age 65 and continuing to age 75. The present value of this annuity is P. Determine P.

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