What is the formula for the present value of an annuity due?
A) $ C \times\left[\left(P_{\mathrm{O}_{N, t}}\right)(P k, t)\right] $

B) $ C \times\left[\frac{1-\frac{1}{(1+i)^{n}}}{i}\right] $

C) $ C \times\left[\frac{1-\frac{1}{(1+i)^{n-1}}}{i}+1\right] $

D) $ C \times\left[\frac{(1+i)^{n}-1}{i}\right] $

Question

What is the formula for the present value of an annuity due?
A) $ C \times\left[\left(P_{\mathrm{O}_{N, t}}\right)(P k, t)\right] $

B) $ C \times\left[\frac{1-\frac{1}{(1+i)^{n}}}{i}\right] $

C) $ C \times\left[\frac{1-\frac{1}{(1+i)^{n-1}}}{i}+1\right] $

D) $ C \times\left[\frac{(1+i)^{n}-1}{i}\right] $

Quizplus · Accepted Answer

The formula for the present value of an annuity due is $ C \times\left[\frac{1-\frac{1}{(1+i)^{n-1}}}{i}+1\right] $, which accounts for payments at the beginning of each period by adding 1 to the standard present value of an ordinary annuity formula.

What Is the Formula for the Present Value of an Annuity