Find the present value of $100 payable at the beginning of each three month period for the next five years, when interest is at the rate of 6% per annum, compounded quarterly.

• 1413
• 1717
• 1723
• 1743
• 1816

References

Hlynka, Myron. "University of Windsor Old Tests 62-392 Theory of Interest". web2.uwindsor.ca. Retrieved November 23, 2023.

Solution: D

5 years=20 quarters. Interest rate is .06/4=.15 per quarter.

[[math]] P V=100 \ddot{a}_{\overline{20} \mid .015}=100(1.015) a_{\overline{20} \mid .015}=100(1.015) \frac{1-1.015^{-20}}{.015}=1742.62 [[/math]]

References

Hlynka, Myron. "University of Windsor Old Tests 62-392 Theory of Interest". web2.uwindsor.ca. Retrieved November 23, 2023.