question archive The present value of an ordinary annuity is used to compute the amount of a single deposit to be made today into an amount earning interest of 6 percent per year compounded monthly
The present value of an ordinary annuity is used to compute the amount of a single deposit to be made today into an amount earning interest of 6 percent per year compounded monthly
Subject:MathPrice: Bought3
The present value of an ordinary annuity is used to compute the amount of a single deposit to be made today into an amount earning interest of 6 percent per year compounded monthly. The deposit must be sufficient to cover a withdrawal of an equal amount each month for 10 years. At the end of the 10 years, the balance in the account should be $0. To solve for the amount needed (the present value), the total number of conversion period (n) is _____ and the interest rate per conversion period is _____.
a) 10 periods, 6 percent
b) 10 periods, 0.5 percent
c) 120 periods, 6 percent
d) 120 periods, 0.5 percent
