In order to compute the present value of an annuity, it is necessary to know the
1. discount rate.
2. number of discount periods and the amount of the periodic payments or receipts.
A)1
B)2
C)both 1 and 2
D)something in addition to 1 and 2

Question

In order to compute the present value of an annuity, it is necessary to know the
1.	discount rate.
2.	number of discount periods and the amount of the periodic payments or receipts.
A)1
B)2
C)both 1 and 2
D)something in addition to 1 and 2

Quizplus · Accepted Answer

The number of discount periods and the amount of the periodic payments or receipts are both important factors in calculating the present value or future value of an investment. Therefore, both 1 and 2 are important considerations.

In Order to Compute the Present Value of an Annuity