What is the present value of $1000 per year annuity for five years at an interest rate of
12%?
A) $6,352.85
B) $3,604.78
C) $567.43
D) None of the above

Question

Quizplus · Accepted Answer

Using the formula for present value of an annuity,
PV = (C/r) * (1 - (1+r)^-n)
where PV is present value, C is the amount of annuity, r is the interest rate, and n is the number of periods.
Plugging in the given values,
PV = (1000/0.12) * (1 - (1+0.12)^-5)
PV = $3,604.78
Therefore, the present value of $1000 per year annuity for five years at an interest rate of 12% is $3,604.78.

What Is the Present Value of $1000 Per Year Annuity