Calculate the Present Value of a 25-Year Annuity Making Semi-Annual

question 147

Multiple Choice

Calculate the present value of a 25-year annuity making semi-annual payments that grow at a rate of 4% compounded annually. The first payment is $25,000 and the funds earn 8% compounded semi-annually.

• A) $606,574.51
• B) $676,574.51
• C) $706,574.51
• D) $776,574.51
• E) $876,574.51

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Definitions:

Goiter

An abnormal enlargement of the thyroid gland, which can lead to a noticeable bulge in the neck, often caused by iodine deficiency.

Thyroid

A gland in the neck that produces hormones regulating growth and metabolism.

Abnormal Enlarged

An atypical condition characterized by the increase in size of an organ, tissue, or other body part beyond the normal range.

Posterior Pituitary

The back part of the pituitary gland that releases hormones, such as antidiuretic hormone and oxytocin, which are produced in the hypothalamus.