If the present value annuity factor for 10 years at 10 percent interest rate is 6.1446, what is the present value annuity factor for an equivalent annuity due?
A)6.1446
B)7.3800
C)6.7590
D)5.7321

Question

Quizplus · Accepted Answer

The present value annuity factor for an annuity due can be found by multiplying the present value annuity factor for an ordinary annuity by (1 + r), where r is the interest rate. Therefore, for an interest rate of 10 percent (or 0.10), the calculation is 6.1446 * (1 + 0.10) = 6.75906, which rounds to 6.7590.

If the Present Value Annuity Factor for 10 Years at 10