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Problem

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Textbook Expert
Textbook ExpertVerified Tutor
2 Nov 2021

Given information

Note that given,

The annuity formula where represents the present value of an annuity, represent the payment amount, is the interest rate per time period and is the number of payments that will be made. 

Step-by-step explanation

Step 1.

Note that according to the question, and payments are to be made every month for years.

 

Therefore,

 

Replace by ,

 

Simplify further,

 

Hence,

 

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