You are considering buying a 3 year, $2500 annuity (annual payments). You receive the first payment in exactly one year. The required rate of return is 10% for year 1, 6% for year 2, and 5% for year 3. What is the value of this annuity?© BrainMass Inc. brainmass.com March 4, 2021, 6:07 pm ad1c9bdddf
Given the variant return rate, we have to calculate each payment of the annuity for the ...
The solution explains how to calculate the value of annuity when the interest rate changes each year. The answer is shown in the solution.