Question

Twelve payments of 2,250 each are made at 2-year intervals. Find the value of the series at the time of the final payment at nominal annual discount rate d(4)=0.04.

A) 39,342

B) 49,096

C) 43,653

D) 74,941

E) 67,717

Answer 1

Calculation of value of the series at the time of the final payment
Year	Payment	Future factor @ 4%	Future Value
2	$2,250.00	2.3699	$5,332.32
4	$2,250.00	2.1911	$4,930.03
6	$2,250.00	2.0258	$4,558.09
8	$2,250.00	1.8730	$4,214.21
10	$2,250.00	1.7317	$3,896.27
12	$2,250.00	1.6010	$3,602.32
14	$2,250.00	1.4802	$3,330.55
16	$2,250.00	1.3686	$3,079.28
18	$2,250.00	1.2653	$2,846.97
20	$2,250.00	1.1699	$2,632.18
22	$2,250.00	1.0816	$2,433.60
24	$2,250.00	1.0000	$2,250.00
Value of the series			$43,105.81
The answer is Option C which is nearest to exact anwer of $43,105.81