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5 votes
. If Maria saves $300 every month for 2 years, find the present value of her investment assuming 12% annual

nterest rate, compounded monthly.

$5,674.18
$3,376.52
$6,373.02
$2,124.34

User Azi
by
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1 Answer

2 votes

Answer:

The correct answer is $6,373.02.

We can use the formula for present value of an annuity:

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

Where PV is the present value, PMT is the monthly payment, r is the annual interest rate, n is the number of times the interest is compounded per year, and t is the number of years.

Plugging in the values, we get:

PV = 300 x ((1 - (1 + 0.12/12)^(-12*2)) / (0.12/12))

PV = $6,373.02

Therefore, the present value of Maria's investment is $6,373.02.

User Kels
by
7.9k points