Annuity problem

timothy.regan@us.zurich.com
Tue, 6 Apr 1999 07:49:37 -0500

Help! No matter how many different approaches I use, I can't come up with the
given answer :

"An annuity has the following series of payments:

* $1,000 per year for the first 4 years payable continuously
* $1,000 starting at the end of the 5th year, increasing by X per year at
the end
of years 6 through 11
* $3,000 per year at the beginning of years 13 through 15

The nominal rate of interest is 10% compounded twice per year. The accumulated
value of the payments at the end of the 15th year is $50,000.

Determine X.

a.) Less than $295
b.) At least $295, but less than $305
c.) At least $305, but less than $315
d.) At least $315, but less than $325
e.) $325 or more "

The given answer is A.