# Question

Find the present value of a 3-year, $20,000 ordinary annuity deposited into an account that pays 12% annual interest, compounded monthly. Solve for the present value of the annuity in the following ways:

a. As three single cash flows discounted at the stated annual rate of interest

b. As three single cash flows discounted at the appropriate effective annual rate of interest

c. As a 3-year annuity discounted at the effective annual rate of interest

a. As three single cash flows discounted at the stated annual rate of interest

b. As three single cash flows discounted at the appropriate effective annual rate of interest

c. As a 3-year annuity discounted at the effective annual rate of interest

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