If you buy an item and pay for it with 48 monthly payments of $75, beginning next month, what was the cash price today, if interest accrues at 13% per year, compounded monthly?
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A. B. C. D. E.C
The cash price would be the present value of the payments made using the specified interest rate. On the BAII Plus, press 48 N, 13 divide 12 = I/Y, 75 PMT, 0 FV,
CPT PV. On the HP12C, press 48 n, 13 ENTER 12 divide i, 75 PMT, 0 FV, PV. Note that the answer will be shown as a negative number. Make sure the BAII Plus has the P/Y value set to 1.