Concept explainers
To find: The present value of annuity
Answer to Problem 12E
The present value of annuity is $8,132.65.
Explanation of Solution
Given:
The periodic payment per month is $300.
The rate of interest is 8% per year.
The number of payments is 30.
Formula used:
The formula for present value of annuity is given by,
Where, AP is present Value of Annuity, R is Periodic Payment, i is Interest Rate and n is the Number of Years.
Calculation:
The interest rate per month is
Substitute
Simplifying further,
Therefore, the Present value of annuity is $8,132.65.
Chapter 12 Solutions
Precalculus: Mathematics for Calculus - 6th Edition
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