M Final Review Extra Credit x c Chegg Study I Guided Sc x C ezt com 30.60351984

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M Final Review Extra Credit x c Chegg Study I Guided Sc x C ezt com 30.60351984 53275604 1449354434337 o.mheducation /hm.tpx EEE P MyLab & Masterin... M McGraw-Hill Connect Lesson5 Bookmark BMGT 481W BFIN 300 Financial Management FA15: FA15 FINANCE Final Review Extra Credit Question 6 (of 15 1.66 points Your parents are giving you $190 a month for 5 years while you are in college. At a 5 percent discount rate, what are these payments worth to you when you first start college? $11,400.00 $8,955.00 $10,068.23 $10,319.23 $9,868.23 Check my work Windows 3 OD Seong Ny Seong Nyeon Kim instructions l help Save & Exit 7:27 2015-12-06

Explanation / Answer

Present value of annuity = P×[1-(1÷(1+r)^n))]÷r

r is interest rate per period

P is payment per period

n is number of payments

= $190×[1-(1÷(1+(5%÷12))^(5×12)))]÷(5%÷12)

= $10,068.23

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