Mary Needs a Pension That Will Pay Her $12,000 One

Mary needs a pension that will pay her $12,000 one year from now and annual payments for 24 more years that are each 5% larger than the previous year. If the funds in her Retirement Fund earn 7.5% compounded annually, how much money must she have there now?

A) $188,490
B) $266,540
C) $532,842
D) $213,460
E) $487,671

Correct Answer:

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