Payments of $ 670 are being made at the end of each month for 5 years at an interest of 8% compounded monthly. Calculate the Present Value.
Present value | = | Monthly payment | * | Present value of annuity of 1 | |||||
= | $ 670.00 | * | 49.31843 | ||||||
= | $ 33,043.35 | ||||||||
Working: | |||||||||
Present value of annuity of 1 | = | (1-(1+i)^-n)/i | Where, | ||||||
= | (1-(1+0.006667)^-60)/0.006667 | i | = | 8%/12 | = | 0.006667 | |||
= | 49.3184333 | n | = | 5*12 | = | 60 |
Payments of $ 670 are being made at the end of each month for 5 years...
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