Question

Takeshi has inherited $3 million which he will receive as 35 equal annual payments P with...

Takeshi has inherited $3 million which he will receive as 35 equal annual payments P with the first payment in one year's time. The effective annual rate is r. Which of the following pairs is correct? (To the nearest $1.)

a) r = 2%, P = $120007

b) r = 2%, P = $117654

c) r = 2%, P = $120207

d) r =3%, P = $117654

e) r =3%, P = $120007

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