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5. You have moved into an apartment following graduation. Your apartment costs $750 per month, due...

5. You have moved into an apartment following graduation. Your apartment costs $750 per month, due at the beginning of each month. If you signed a 12-month rental agreement, what is the present value of the rent payments, assuming an annual interest rate of 10%? Show all work and/or numbers entered.

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Answer #1

Annuity means repeating payments every month at the beginning of each period. This can be considered similar to paying rent. An annuity is structured such as all the annuities paid are of the same amount and are made at equal intervals and are made at the beginning of each period.

So the Present value of Rent Payments is 5621.27$.

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