A settlement in a court case awards an individual year end payments for 20 years, with the first coming one year from now. These will be deposited into an account earning 3% annual effective interest. The first payment is $4000 and each payment after that is 2% greater than the previous payment. The recipient of this settlement has the option of accepting the present value of this payment stream as a single lump sum payment. What is this lump sum amount?

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Present value of Annuity with growth formula for period end payments is as followed PV of An... View the full answer