Homework Answers
Answer:
Let r be the interest rate
n=7 years
PV of annuity =2700*(1-(1+r)^-7)/r
Given PV of annuity=$14,551
2700*(1-(1+r)^-7)/r=14551
r=7%
So FV of $14551 =$23,366
Since FV of Gradient =G*[{(1+r)^n-1}/r^2 - n/r]=G*[{1+7%)^7-1}/7%^2-7/7%]=23.63G
Given FV of Gradient=FV of $14551
23.63G=23366
G=$988.83
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