You are due to receive $500 every 3 months from your parents starting 3 months from...

You are due to receive $500 every 3 months from your parents starting 3 months from the day you were born. If the three-month interest rate is 0.2%, what is the value of these payments on your 18^th birthday?

Solutions

Expert Solution

Three month interest rate = 0.2%

Payment per period = 500

Number of payments per year = 4

Total years = 18

Total Payments = 18 * 4 = 72

Value of this payments = Sum of Present Value of payments discounted @ 0.2%

Value of these payments = $33496.93 Answer

jeff jeffy answered 1 year ago

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