For many problems with non-annual payments and interest rates, it is easier to work with non-annual periods rather than working with years and calculating effective rates. For instance, an annuity paying $50 every six months for 5 years, with a nominal interest rate of 8% is easier to solve if you think of a 10-period annuity (rather than 5 years) with a periodic interest rate of 4% (rather than an 8% annual rate). Multiply the number of years by the periods per year and divide the interest rate by the periods per year. This method can be used for any period of time, including semi-annual, quarterly, and monthly periods. However, be sure that the number of periods always equals the number of payments being made. A security pays $100 monthly for the next 10 years and the appropriate nominal interest rate is 12%. What is the present value of this security? How many payments (or periods) are there? What is the periodic interest rate? Annuity PV-S