The worth of these payments to Tracie today at a discount rate of 6% compounded monthly is $49,540.40.
The present value is the discounted value of future cash flows. It can be calculated using an online finance calculator as below:
Periodic receipts = $550 per month
Period of receipts = 10 years
Interest interest = 6% compounded monthly
N (# of periods) = 120 (10 years x 12 months)
I/Y (Interest per year) = 6%
PMT (Periodic Payment) = $550
FV (Future Value) = $0
P/Y (# of periods per year) = 12
C/Y (# of times interest compound per year) = 12
Results:
PV = $49,540.40
Sum of all periodic payments = $66,000.00 ($550 x 120)
Total Interest = $16,459.60
Thus, the worth of these payments to Tracie today at a discount rate of 6% compounded monthly is $49,540.40.
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