1. Find the present value of an annuity of P33,000 payable at the end of each year if the first payment is made at the end of 3 years and the last payment is made at the end of 9 years. Assume money is worth 10% effective.

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Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.