To determine how much must be deposited in the bank today so that you can withdraw 6 annual payments beginning one year from now, which interest factor will you need?
A) Future value of an ordinary annuity of 1
B) Future value of an annuity due of 1
C) Present value of an ordinary annuity of 1
D) Present value of an annuity due of 1

Question

Quizplus · Accepted Answer

To find out how much to deposit today for future withdrawals, you need the present value of an ordinary annuity, which calculates the current worth of a series of future payments.

To Determine How Much Must Be Deposited in the Bank