Find the present value of an annuity if $1,900.00 is paid to you at the end of each month for 7 years, if interest is earned at a rate of 6%, compounded monthly.
The present value is $. (Round to 2 decimal places.)
To find the present value of the annuity, we can use the formula for the present value of an ordinary annuity:
Present Value = Payment per period * (1 - (1 + interest rate)^(-number of periods)) / interest rate
Here, the payment per period is $1,900.00, the interest rate is 6% (or 0.06), and the number of periods is 7 years * 12 months/year = 84 months.
Present Value = 1900 * (1 - (1 + 0.06)^(-84)) / 0.06
Calculating this expression gives us the present value of the annuity rounded to 2 decimal places.