In: Finance
annuity in year 0 =800
growth =7%
Rate =5%
PV of annuity using formula of Geometric
Progression=800/(1+5%)+800*(1+7%)/(1+5%)^2.............800*(1+7%)^23/(1+5%)^24
=800/1.05*(1+1.07/1.05.........+1.07^23/1.05^23)
=800/1.05*(1-(1.07/1.05)^24)/(1-1.07/1.05)=22911.13