The present value of a 5-year annuity is X. The annuity pays 600 at the end of the first month, 590 at the end of the second month, and for each month thereafter the payment decreases by 10. The annual nominal interest rate is 3% compounded monthly. Calculate X.

The present value of a 5-year annuity is X. The annuity pays 600 at the end of the first month, 590 at the end of the second month, and for each month thereafter the payment decreases by 10. The annual nominal interest rate is 3% compounded monthly. Calculate X.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 7P

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Question

The present value of a 5-year annuity is X.
The annuity pays 600 at the end of the first month, 590 at the end of the second month,
and for each month thereafter the payment decreases by 10.
The annual nominal interest rate is 3% compounded monthly.
Calculate X.
A 16,402.37
B 16,834.05
C 16,845.29
D 17,390.57
E 17,402.37

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