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(Solved): Suppose the interest rate is 8.8% APR with monthly compounding. What is the present value of an annu ...
Suppose the interest rate is 8.8% APR with monthly compounding. What is the present value of an annuity that pays $100 every three months for seven years? (Note: Be careful not to round any intermediate steps less than six decimal places.)
Firstly, let's understand the terms:APR stands for "Annual Percentage Rate". This is the annual interest rate.Monthly compounding means that the interest is compounded on a monthly basis.An annuity is a series of equal payments made at regular intervals. In this case, it's $100 every three months (quarterly) for 7 years.