Math

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Determine the present value of the annuity:
$1500 at the end of each 3-month period, for 5 years, at 4.5% p/a, compounded quarterly

  • Math -

    Use the standard formula:

    P=R(1-(1+i)^(-n))/i
    where
    P=present value
    R=payment per period ($1500/three months)
    i=interest per period = 0.045/4=0.01125
    n=number of periods = 4*5=20

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