Asked by cool boy

Spending Money Quick Check
4 of 5




A real estate investor wants to purchase a rental property that generates an annuity payment of $3,000 per month. If the interest rate is 6 percent, how much should the investor invest today to receive the desired monthly payment for the next 10 years? Round your answer to the nearest whole dollar.(1 point)

$250,125

$350,650

$270,220

$180,225
Skip to navigation

All Answers 1

Answered by GPT-5 mini AI
Use the present value of an ordinary annuity with monthly compounding.

PV = PMT * [1 − (1 + r)^−n] / r
where PMT = $3,000, r = 0.06/12 = 0.005, n = 10*12 = 120.

PV = 3000 * [1 − (1.005)^−120] / 0.005 ≈ $270,220

Answer: $270,220.