In order to compute the present value of an annuity it is necessary to know the
1) discount rate.
2) number of discount periods and the amount of the periodic payments or receipts.
A) 1
B) 2
C) both 1 and 2
D) something in addition to 1 and 2

Question

Quizplus · Accepted Answer

The present value of an annuity formula requires both the discount rate (1) and the number of discount periods and the amount of the periodic payments or receipts (2). Therefore, both options 1 and 2 are necessary to compute the present value of an annuity.

In Order to Compute the Present Value of an Annuity