The maker of cardboard boxes leases a warehouse and pays $9,000 at the beginning of each month for 5 years.

Question

The maker of cardboard boxes leases a warehouse and pays $9,000 at the beginning of each month for 5 years. If interest rates are 3.75% compounded monthly, what is the present value (in dollars) of the payments? 

Answer 1

The first payment will be valued at 9000, the second will be worth 9000/(1+.0375/12) in today's dollars, the second 9000/(1 + .0375/12)² and so on until the 60th payment.

This is a geometric series with r = 1/(1.0375/12) and the sum formula is a₁(1-rⁿ)/(1-r) n = 60 and a₁=9000

I get about 490K