A 15-year annuity pays $1,475 per month, and payments are made at the end of each month. If the interest rate is 9 percent compounded monthly for the first seven years, and 6 percent compounded monthly thereafter, what is the present value of the annuity? (Do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.)

First of all we shall calculate the present value of an annuity (at the end of 7 years) of 1475

at interest rate of 6/12 =.5 % for total instalment of 12 x 8 = 96 (6% compounded monthly)

rate of intt. 5%, no of instalment 96

PV of annuity of 1475

= 112252.66

This amount has to be discounted at 9 % to present value for 7 years

or calculated at 9/12 =.75% for 84 instalment

PV of 112252.66

= 59925.55

Now, we shall calculate PV of annuity of 1475 for 7 years compounted monthly (rate of intt. 75 %, no of instalment 84)

PV of annuity of 1475

= 91671.84

Total value

= 59925.55 + 91671.84

= 151597.39