CHEGG Suppose you invest $210,000 in an annuity that returns 6 annual payments, with the first payment one year from now and each subsequent payment growing by 5%. At an interest rate of 8%, how much is the first annual payment you receive

$40,511.23

Explanation:

This is a case of growing annuity and the amount invested in the annuity of $210,000 is the present value of the growing annuity, hence, using the present value formula of a growing annuity as shown thus

PV=(C/r-g*)(1-(1+g)^T/(1+r)^T)

PV=$210,000

C=first annual payment=unknown

r=rate of return=8%

g=growing rate=5%

T=number of years that annual payments would be received=6

$210,000=C/8%-5%*(1-(1+5%)^6/(1+8%)^6))

$210,000=C/0.03*(1-(1+0.05)^6/(1+0.08)^6

$210,000=C/0.03*(1-(1.05)^6/(1.08)^6))

$210,000=C/0.03*(1-(1.3400956406/1.5868743229)

$210,000=C/0.03*0.1555124300

$210,000=C/0.03*0.1555124300

C=$210,000*0.03/0.1555124300

C=$40,511.23

1   b) the use of non-standard grammar  

2   a) quiet and shy.

forbearance of student loan payments. under forbearance, your loan payments are postponed (or reduced) but interest continues to accrue during the period of forbearance. if you don't pay the interest during that period, the interest may be “capitalized,” which means it is added to your principal balance.