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Your grandmother will be gifting you $150 at the end of each month for four years while you attend college. At a discount rate of 3.7 percent, what are these payments worth to you on the day you enter college?

Respuesta :

Answer:

$6,682.99

Explanation:

For this question we use the present value formula that is shown in the attachment below:

Given that,  

Future value = $0

Rate of interest = 3.7% ÷ 12 months = 0.3083333%

NPER = 4 years  × 12 months = 48 months

PMT = $150

The formula is shown below:

= -PV(Rate;NPER;PMT;FV;type)

So, after solving this, the present value is $6,682.99

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