Hi guys,

I was wondering if someone could confirm or assist in this problem with the current answer I have?

Problem:

A student bought a rental property for $60 000.00 down and monthly payments of $1500.00 for 5 years. What is the equivalent cash price if money is worth 5.75% compounded semi-annually?

Answer:

PMT = 1500; I = 5.75%/2 = 0.02875; n = 5(12) = 60;

PV = 1500[1 – (1.02875)-60 / 0.02875](1.02875)

= 1500(28.434645)(1.02875)

= 42651.97(1.02875)

= $43878.21

The equivalent cash price is $43,878.21

Thanks very much