jasper is bequeathed a thirty-year deferred annuity that has a payment at the end of each third year. the first payment is for $16,000 and is made five years after she receives the inheritance. there is always an increase of $2,000 from one payment to the next. find the value of her legacy at the time of the bequest, assuming that the annual effective interest rate remains level at 6%. do this problem twice, once using chapter 3 methods and once using section 4.4 techniques

The proportion of interest on a loan or financial product that would apply if compound interest built up over a year without any payments would be called the effective interest rate, also known as the effective interest rate, annual equivalent rate, or simply effective rate. The interest rate that is actually earned on a loan or paid on an investment after interest has been compounded over a specified amount of time is known as the Effective Annual Rate (EAR).

Computation of Value of Jasper Legacy:

Value of Jasper Legacy = P1 * PVF (5%, 5 years) + P2 * PVF (5%, 8 years) + P3 * PVF (5%, 11 years) + P4 * PVF (5%, 14 years) + P5 * PVF (5%, 17 years) + P6 * PVF (5%, 20 years) + P7 * PVF (5%, 23 years) + P8 * PVF (5%, 26 years) + P9 * PVF (5%, 29 years) + P10 * PVF (5%, 32 years)

Where P = Payment Number;

PVF Present Value Factor

Value of Jasper Legacy = $15000 * 0.7835 + $19000 * 0.6768 + $23000 * 0.5847 + $27000 * 0.5051 + $31000 * 0.4363 + $35000 * 0.3769 + $39000 * 0.3256 + $43000 * 0.2812 + $47000 * 0.2429 + $51000 * 0.2099

Value of Jasper Legacy = $11725.89 + $12859.95 + $13447.62 + $13636.83 + $13525.20 + $13191.13 + $12697.28 + $12093.35 + $11418.48 + $10703.17

Value of Jasper Legacy = $125325.91

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