A 20 year annuity pays $2200 + 300n on the last day of the nth month of the year

Question

A 20 year annuity pays $2200 + 300n on the last day of the nth month of the year. Thus, it
pays $2500 each January 31, $2800 each February 28, .... and $5800 each December 31. The
first payment is on January 31. Find the value of this annuity at the time of the first payment
(just before the first payment has been made) using an annual effective interest rate of 6%.
Give your answer to the nearest dollar and solve the problem in TWO ways:
(a) Convert the interest to match the payment period.
(b) Convert the payments to match the annual interest period.

Explanation / Answer

a) interst = 6.32%
b) payments = $63,00

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