You Have a 20-Year Annuity with a Present Value of $575,000

question 61

Multiple Choice

You have a 20-year annuity with a present value of $575,000. If the APR is 6%, what is the monthly yield?

• A)$4119.48
• B)$4325.67
• C)$3761.26
• D)$4439.18

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Definitions:

Amortized

The process of paying off a debt with a fixed repayment schedule in regular installments over a period of time.

Loan Payments

The regular payments made to repay borrowed money, typically including both principal and interest components.

Amortized

A process of paying off debt in regular installments over a period of time, where each payment is partially principal and partially interest.

Compounded Semi-annually

Refers to the process of calculating interest on both the initial principal and the accumulated interest from previous periods twice a year.