7) A twenty-year annuity pays $100 at the end of each odd numbered year (i.e.,...
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7) A twenty-year annuity pays $100 at the end of each odd numbered year (i.e., year 1, year 3,year 5,) and $200 at the end of each even numbered year (i.e., year 2, year 4,year 6,).
a) (3 points) Write an equation for the present value of this annuity. You may write a first principles equation or you may use annuity symbols.
b) (3 points) What is the present value of this annuity if the annual effective interest rate = 6%?
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