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Find the pv of the obligation

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Reference no: EM132701817

An insurance company is making annual payments to pay the medical costs for a claimant. The annual claims costs are valued at $2000 today, and are expected to increase with inflation at a rate of 3% per year. Payments are made for 18 years with the first payment to be made five years from today.

Problem 1: Find the PV of this obligation (at t=0) if the annual effective interest rate is 4%.

A 30,698

B 31,637

C 32,519

D 33,928

E 34,506

Reference no: EM132701817

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