In the present value of an annuity table, the factors
A)increase as the interest rates increase
B)decrease as the periods increase
C)remain the same as the periods increase
D)decrease as the interest rates increase

Question

Quizplus · Accepted Answer

The factors in the present value of an annuity table represent the present value of a series of equal payments made at regular intervals, and are calculated based on two inputs: the interest rate and the number of periods. As the interest rate increases, the present value of the annuity decreases, so the factors in the table must decrease as the interest rates increase. This means that choice D is the correct answer.

In the Present Value of an Annuity Table, the Factors