A 20-year annuity pays $2,350 per month, and payments are made at the end of eac

Question

A 20-year annuity pays $2,350 per month, and payments are made at the end of each month. If the interest rate is 13 percent compounded monthly for the first eight years, and 10 percent compounded monthly thereafter, what is the present value of the annuity? (Do not round intermediate calculations and round your final answer to 2 decimal places (e.g., 32.16).)

A 20-year annuity pays $2,350 per month, and payments are made at the end of each month. If the interest rate is 13 percent compounded monthly for the first eight years, and 10 percent compounded monthly thereafter, what is the present value of the annuity? (Do not round intermediate calculations and round your final answer to 2 decimal places (e.g., 32.16).)

Explanation / Answer

annutiy value is $2350per month for next 8 years t 13% interest rate compounded monthly, the total value will be:

= (2350X 12.= 28,200X 12.7= $358,140 for the first 8 years

for the next 12 years the rate of interest is 10%,

28000X21.384= 598,752

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