If the present value annuity factor at 8% APR for 10 years is 6.71, what is the equivalent future value annuity factor?
A) 3.108
B) 14.487
C) 2.159
D) None of the above

Question

Quizplus · Accepted Answer

We can use the formula for converting present value annuity factor to future value annuity factor:

Future Value Annuity Factor = (1 + r)n / Present Value Annuity Factor

where r is the interest rate per period and n is the number of periods.

Plugging in the values, we get:

Future Value Annuity Factor = (1 + 0.08)10 / 6.71
                           = 2.159 * 2.159
                           = 4.666

Therefore, the equivalent future value annuity factor is 4.666.

However, this answer is not one of the choices. None of the choices match the correct calculation.

If the Present Value Annuity Factor at 8% APR for 10