Answered

IDNLearn.com offers a unique blend of expert answers and community insights. Our community is here to provide the comprehensive and accurate answers you need to make informed decisions.

What is the present value of $1,200 to be received at the end of each month for 5 years if the discount rate is 6%?
a. $62,071.b. $62,381.c. $63,095.d. $63,274.

Sagot :

Facundobuzzettiidn

Answer:

PV= $62,070.67 = $62,071

Explanation:

Giving the following information:

Monthly payment= $1,200

Number of months= 5*12* 60

Discount rate= 0.06/12= 0.005

To calculate the present value, we need to use the following formula:

PV= A*{(1/i) - 1/[i*(1 + i)^n]}

A= monthly payment

PV= 1,200*{(1/0.005) - 1 / [0.005*(1.005^60)]}

PV= $62,070.67

We appreciate every question and answer you provide. Keep engaging and finding the best solutions. This community is the perfect place to learn and grow together. Discover insightful answers at IDNLearn.com. We appreciate your visit and look forward to assisting you again.