What is the present worth of a geometrically increasing series with a first year payment of...

What is the present worth of a geometrically increasing series with a first year payment of $11,000 increasing at 6% per year for 25 years if the interest rate is 6% compounded annually?

Expert Solution

Period	Cash flow	PVF@6%	Present value
0	$ -	1.000	$ -
1	$ 11,000.00	0.943	$ 10,377.36
2	$ 11,660.00	0.890	$ 10,377.36
3	$ 12,359.60	0.840	$ 10,377.36
4	$ 13,101.18	0.792	$ 10,377.36
5	$ 13,887.25	0.747	$ 10,377.36
6	$ 14,720.48	0.705	$ 10,377.36
7	$ 15,603.71	0.665	$ 10,377.36
8	$ 16,539.93	0.627	$ 10,377.36
9	$ 17,532.33	0.592	$ 10,377.36
10	$ 18,584.27	0.558	$ 10,377.36
11	$ 19,699.32	0.527	$ 10,377.36
12	$ 20,881.28	0.497	$ 10,377.36
13	$ 22,134.16	0.469	$ 10,377.36
14	$ 23,462.21	0.442	$ 10,377.36
15	$ 24,869.94	0.417	$ 10,377.36
16	$ 26,362.14	0.394	$ 10,377.36
17	$ 27,943.87	0.371	$ 10,377.36
18	$ 29,620.50	0.350	$ 10,377.36
19	$ 31,397.73	0.331	$ 10,377.36
20	$ 33,281.59	0.312	$ 10,377.36
21	$ 35,278.49	0.294	$ 10,377.36
22	$ 37,395.20	0.278	$ 10,377.36
23	$ 39,638.91	0.262	$ 10,377.36
24	$ 42,017.25	0.247	$ 10,377.36
25	$ 44,538.28	0.233	$ 10,377.36

Present worth of increasing series			$ 259,433.96

jeff jeffy answered 2 years ago

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