You have just purchased a new BMW for $40,000 to determine your monthly payments which of the following would you use?
A)future value of an annuity of $1 per period
B)present value of an annuity of $1 per period
C)future value of the amount of $1 at compound interest
D)present value of the amount of $1 at compound interest

Question

Quizplus · Accepted Answer

To determine monthly payments, we need to calculate the present value of the car. Therefore, we would use the present value of an annuity of $1 per period, which calculates the amount needed to be paid each period to reach a certain present value.

You Have Just Purchased a New BMW for $40,000 to Determine