Answer:
$20,600.90
Explanation:
The value of $140 per month will be the equivalent of an annuity value of $140 after 28 years. The applicable formula is as below.
PV = P × 1 − (1+r)−n
r
Where PV is the future value
P is present value $140
r is the interest rate 7% or 0.07 per annum which is equivalent to 0.0058 33 per month
n=28 year or 336 months
PV= 140 x 1-( 1 + 0.005833)-336
0.005833
PV = 140 x 1-0.14167860700
0.005833
= 140 x (0.858321393/0.005833)
=140 x 147. 14921
=$20,600.90
