Annuity Question?

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If a question says:
Someone pays $50 each month for 6 months, and $75 thereafter each month for two years at an interest rate of 6% p.a. what is the present value?

Does this mean that the total term is 2 years, or the $75 was paid for 2 years so the total term is 2 and a half years??

2007-03-14 13:07:52 · 2 answers · asked by Anonymous in Business & Finance ➔ Personal Finance

2 answers

It is 2.5 years. $360 invested in the first 6 months at $50 per month, and $1,800 over the next 24 months at $75 per month.

2007-03-15 06:27:48 · answer #1 · answered by xcypher73x 4 · 0⤊ 0⤋

total term is 2.5 years

2007-03-14 20:38:29 · answer #2 · answered by derek 4 · 0⤊ 0⤋