An advertised investment product promises to pay $522 per month for 39 months commencing in 1...
An advertised investment product promises to pay $522 per month for 39 months commencing in 1 month from today. If the investment earns 9.7% p.a compounding monthly, how much will the investment product cost today?
Homework Answers
Present value of annuity= payment per period * [1-(1+i)^-n]/i
i = interest rate per period
n = number of periods
Present value = 522 * [1-(1+0.097/12)^-39]/(0.097/12)
= 17401.54
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