Mathematics

Mathematics

Problem

A trust fund pays 200,000200{,}000 one year from today and each subsequent annual payment is 3%3\% smaller than the one before. If money earns 5%5\% interest compounded annually, what is the present value today of the entire stream of payments (to the nearest dollar)? a) 2,625,0002{,}625{,}000 b) 4,000,0004{,}000{,}000 c) 2,500,0002{,}500{,}000 d) 2,380,9522{,}380{,}952

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