Mr. and Mrs. Espedido’s property taxes, amounting to $2450, are due on July 1.What amount should the city accept if the taxes are paid eight months in advance and the city can earn 6% compounded monthly on surplus funds?

2354.17

2354

2376

2389

Correct Answer: 2354.17

Explanation:

i=j/m

PV= FV(1+ i)^-n

Question

Mr. and Mrs. Espedido’s property taxes, amounting to $2450, are due on July 1.What amount should the city accept if the taxes are paid eight months in advance and the city can earn 6% compounded monthly on surplus funds?

Accepted Answer

i=j/m PV=  FV(1+  i)^-n