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Chemistry Asked by a SnapAndSolve user · about 20 hours ago

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

21. If Maria saves $300 every month for 2 years, find the present value of her investment assuming 12% annual interest rate, compounded monthly.
Using the Present Value of Ordinary Annuity Table, the correct factor for 1% interest and 24 months is 21.24339.

Answer

To find the present value of Maria's investment, we use the formula for the present value of an ordinary annuity:

PV = PMT × PVIFA

Where:

  • PV is the present value.
  • PMT is the monthly payment ($300).
  • PVIFA is the present value interest factor of an annuity, given as 21.24339.

Substitute the given values:

PV = $300 × 21.24339 = $6,373.02

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

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