A Varying Annuity Has 15 Annual Payments

question 36

Multiple Choice

A varying annuity has 15 annual payments.The first payment is $2000,and each succeeding payment increases by 5%.What is the accumulated value of these payments immediately after the 15^th deposit if j₁ = 8%? (Answer to nearest dollar)

• A)$24,814
• B)$72,883
• C)$78,713
• D)$51,586

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Definitions:

GAAP

Generally Accepted Accounting Principles represent a unified collection of accounting rules, standards, and processes that organizations in the United States are required to adhere to when preparing their financial reports.

Troubled Debt Restructuring

A process where terms of a debt are modified due to financial difficulties of the borrower, often involving concessions by the lender.

Continuation

The process of extending or carrying on an activity without interruption.

Undiscounted Sum

The total of all future cash flows associated with an investment or project without adjusting them for their present value.