I. Find the present value of $1000 received every month end for 20 years if the interest rate is J12 = 12% p.a.
Answers
Answer:
principal = 1000*12*20= 240000
as money receive for each month for 20 yrs
si = 240000*12*20/100= 480000
amt = 200000+480000= 680000
Given : $1000 Deposited every month at the 12 % per annum for 20 years
To find : Value after 20 Years
Solution:
P = 1000 $ Per month
20 Years = 20 * 12 = 240 months
Total amount deposited = 1000 * 240 = $ 240000
R = 12 % per annum = 1 % per amount
Simple interest = P * R * T /100
1st month Deposit will earn interest for 240 months
2nd month Deposit for 239 months
Last month Deposit for 0 months
Hence Si = (1000 * 1 * )/100 ( 240 + 239 + ..........................+ 1 + 0)
= 10 * 240 * 241/2
= 289200 $
Total amount received = 240000 + 289200
= 529200 $
Present value = 529200 $
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