Question

Using technology, determine the present value given that you make monthly payments of $250.00 at 2.3% compounded monthly over a 5 year period. Round your answer to the nearest cent.

Answer 1

Here is the answer. Since the given amount $250 is compounded monthly over a 5 year period with an interest of 2.3%, here is the answer. First, we get 2.3% of $250 and the answer is $5.75. In a year, there is 12 months. 12 months times 5 years is 60 months. Now we multiply 60 by 5.75 and the answer is $345. Therefore, the present value of $250 is $595. Hope this helps.