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Whats down has just rented a warehouse and must pay monthly rent of $12,000 for the next 9 years. the first payment is due today. What is the value of the payments today if the apr is 6.36%, compounded monthly?

User Presnus
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Final answer:

The value of the payments today for a rented warehouse with monthly rent of $12,000 for the next 9 years at an APR of 6.36%, compounded monthly is $85,840.32.

Step-by-step explanation:

To find the value of the payments today, we can use the present value formula. The formula is:

PV = PMT(1 - (1 + r/n)^(-n*t))/(r/n)

In this formula, PV is the present value of the payments, PMT is the monthly payment, r is the annual interest rate, n is the number of compounding periods per year, and t is the number of years.

In this case, the monthly payment is $12,000, the annual interest rate (APR) is 6.36% (convertible monthly), n is 12 (compounded monthly), and t is 9 (years).

Substituting the values into the formula, we get:

PV = 12000(1 - (1 + 0.0636/12)^(-12*9))/(0.0636/12)

Simplifying the expression gives PV = $85,840.32.

Therefore, the value of the payments today is $85,840.32.

User Jacob Tomlinson
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