A 10-year annuity pays $2,500 per month, and payments are made at the end of eac

Question

A 10-year annuity pays $2,500 per month, and payments are made at the end of each month. The interest rate is 9 percent compounded monthly for the first four years, and 7 percent compounded monthly thereafter.

What is the present value of the annuity? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

A 10-year annuity pays $2,500 per month, and payments are made at the end of each month. The interest rate is 9 percent compounded monthly for the first four years, and 7 percent compounded monthly thereafter.

Explanation / Answer

Payment $2,500 Months 48 Annual rate 9% Payment $2,500 Months 84 Annual rate 7% Present Value $62,926.72

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