Terms of a 20-Year Annuity-Certain: All Payments Are Made on 1/1

Multiple Choice

Terms of a 20-year annuity-certain: All payments are made on 1/1 Initial payment = $300 Each of the next 9 payments is $300 more than the preceding payment Each of the subsequent 10 payments is $200 less than the preceding payment Interest rate: 7% per year, compounded annually for the first 10 years 6% per year, compounded annually thereafter X = the present value of the annuity immediately before the first payment is made. In what range is X?

A) Less than $18,600
B) $18,600 but less than $18,800
C) $18,800 but less than $19,000
D) $19,000 but less than $19,200
E) $19,200 or more