What is the present value of $5000 per year annuity at a discount rate of 10% for 6 years?
A) $21,776.30
B) $3,371.91
C) $16,760.78
D) None of the above

Question

Quizplus · Accepted Answer

The formula for present value of an annuity is PV = C * [(1 - (1 + r)^-n) / r], where PV is the present value, C is the amount of each payment, r is the discount rate, and n is the number of periods. Plugging in the given values, we get PV = 5000 * [(1 - (1 + 0.10)^-6) / 0.10] which simplifies to PV = $16,760.78. Therefore, the correct choice is C.

What Is the Present Value of $5000 Per Year Annuity