You need $600 in 6 months for your annual liability insurance umbrella. If your investments earn...

Question

Question

business finance

Answer 1

Answer #1

Answer: $ 151

Rate of interest per month = 4 / 100 x 1/ 12 = 0.0033

n = 4

PVA _{i, n} = [ { 1 - ( 1 / ( 1 + r ) ⁿ } / r ]

PVA _{0.0033 , n=4} = [ { 1 - 1 / ( 1.0033 ) ⁴ } / 0.0033 ] = 3.96722

Monthly investment = $ 600 / 3.96722 = $ 151.24

Answer 2

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