Jason just joined a new gym and signed up for a one-year membership. Membership fees can be paid in 12 monthly payments of $50,

Question

2 years ago

12

Jason just joined a new gym and signed up for a one-year membership. Membership fees can be paid in 12 monthly payments of $50,

due at the beginning of each month or in one payment today. If the appropriate interest rate is 11%,.How much should he pay today for the annual membership?

Business

1 answer:

bixtya [17] · Answer 1 · 2022-03-14T13:42:58+03:00

Answer:

$570.91

Explanation:

For computing, the amount pay today for the annual membership we just need to apply the present value formula i.e to be shown in the attachment

Provided that

Future value = $0

Rate of interest = 11% ÷ 12 months = 0.916666%

NPER = 12 months

PMT = $50

The formula is shown below:

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

So, after applying the above formula, the amount paid today for the membership is $570.91