Home > Student Questions > Pyramid Example A.2.106

Pyramid Example A.2.106

January 30th, 2008

At the end of the pyramid lesson I solve problem 106.  A student sent me a better solution.  The key thing to notice is the difference between the 12-year annuity and the 11-year annuity is just a level payment of 1 for 6 years.  So the present-value of the 12 year annuity equals the present-value of the 11 year annuity plus a-angle-6.  We find a-angle-6 = 5 just like I did in the lesson, then the present value of the 12-year annuity = 25 + 5 = 30.

James Student Questions

  1. No comments yet.
  1. No trackbacks yet.