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Monthly interest rate=12/12=1%
Present value(PV) of monthly payment=(payment)/((1+i)^N)
i=interest rate=1%=0.01
N=month of payment
Monthly payments and PV of each monthly payment are given below:
N
A
B=A/(1.01^N)
Month
Payment
PV of payment
0
$2,400
2400
1
$2,300
2277.227723
2
$2,200
2156.651309
3
$2,100
2038.239311
4
$2,000
1921.960689
5
$1,900
1807.784806
6
$1,800
1695.681423
7
$1,700
1585.620693
8
$1,600
1477.573156
9
$1,500
1371.509736
10
$1,400
1267.401737
11
$1,300
1165.220833
TOTAL
21164.87142
Present value=$21,164.87
If the payment is starting with $1300 at time t=0,
N
A
B/(1.01^N)
Month
Payment
PV of payment
0
$1,300
1300
1
$1,400
1386.138614
2
$1,500
1470.444074
3
$1,600
1552.944237
4
$1,700
1633.666586
5
$1,800
1712.638238
6
$1,900
1789.885947
7
$2,000
1865.436109
8
$2,100
1939.314767
9
$2,200
2011.547613
10
$2,300
2082.159996
11
$2,400
2151.176922
TOTAL
20895.3531
Present Value=$20,895.35
N
A
B=A/(1.01^N)
Month
Payment
PV of payment
0
$2,400
2400
1
$2,300
2277.227723
2
$2,200
2156.651309
3
$2,100
2038.239311
4
$2,000
1921.960689
5
$1,900
1807.784806
6
$1,800
1695.681423
7
$1,700
1585.620693
8
$1,600
1477.573156
9
$1,500
1371.509736
10
$1,400
1267.401737
11
$1,300
1165.220833
TOTAL
21164.87142
Solution
Monthly interest rate=12/12=1%
Present value(PV) of monthly payment=(payment)/((1+i)^N)
i=interest rate=1%=0.01
N=month of payment
Monthly payments and PV of each monthly payment are given below:
N
A
B=A/(1.01^N)
Month
Payment
PV of payment
0
$2,400
2400
1
$2,300
2277.227723
2
$2,200
2156.651309
3
$2,100
2038.239311
4
$2,000
1921.960689
5
$1,900
1807.784806
6
$1,800
1695.681423
7
$1,700
1585.620693
8
$1,600
1477.573156
9
$1,500
1371.509736
10
$1,400
1267.401737
11
$1,300
1165.220833
TOTAL
21164.87142
Present value=$21,164.87
If the payment is starting with $1300 at time t=0,
N
A
B/(1.01^N)
Month
Payment
PV of payment
0
$1,300
1300
1
$1,400
1386.138614
2
$1,500
1470.444074
3
$1,600
1552.944237
4
$1,700
1633.666586
5
$1,800
1712.638238
6
$1,900
1789.885947
7
$2,000
1865.436109
8
$2,100
1939.314767
9
$2,200
2011.547613
10
$2,300
2082.159996
11
$2,400
2151.176922
TOTAL
20895.3531
Present Value=$20,895.35
N
A
B=A/(1.01^N)
Month
Payment
PV of payment
0
$2,400
2400
1
$2,300
2277.227723
2
$2,200
2156.651309
3
$2,100
2038.239311
4
$2,000
1921.960689
5
$1,900
1807.784806
6
$1,800
1695.681423
7
$1,700
1585.620693
8
$1,600
1477.573156
9
$1,500
1371.509736
10
$1,400
1267.401737
11
$1,300
1165.220833
TOTAL
21164.87142

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