Compute the present value of an annuity

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1. Compute the present value of an annuity of $ 712 per year for 19 years, given a discount rate of 7 percent per annum. Assume that the first cash flow will occur one year from today (that is, at t = 1).

2. Several years ago, Bill Smith borrowed $125,000 to buy his house. He has a 15 year, monthly payment mortgage with an interest rate of 8.75 percent per annum. Bill is thinking about refinancing his house so he would like to know the payoff on his current loan. Assuming that he just made payment number 128 , compute the payoff on Bill's loan.

Reference no: EM131880176

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