Final answer:
The monthly premium equivalent to the given annual premium of $3,450 at 6% p.a. compounded monthly is $286.80.
Step-by-step explanation:
The formula to calculate the monthly equivalent premium is:
Monthly Premium = Annual Premium * r^n / (1 - (1 + r)^-n)
Where:
Annual Premium = $3,450
r = 6% p.a. compounded monthly (divide the rate by 12 to get the monthly rate, which is 0.06/12)
n = Number of years (1 year in this case)
Plugging in the values, we get:
Monthly Premium = 3450 * (0.06/12)^1 / (1 - (1 + 0.06/12)^-1) = $286.80
Therefore, the monthly premium equivalent to the given annual premium is $286.80.