Question: Ruth plans to rent an apartment for two years. This requires her to take out a loan for the full amount of her rent and invest it over the time period that she is renting so she can pay rent out of the account for the two years. Ruth's rent will be due at the beginning of each month and the dollar equivalent of her apartment payments is $2, 500 per month.
What is the present value of what Ruth will need to borrow in order to have the rent money available, if she can invest at an annual interest rate of 6%, compounded monthly?