Find the present value of an annuity with annual payments of $3,250 at 5.45%, compounded annually for 24 years.Round to the nearest cent.
A) $\quad P V = \$ 42,961.75$
B) $\quad P V = \$ 40,799.07$
C) $\quad P V = \$ 82,251.00$
D) $\quad P V = \$ 42,946.39$
E) $\quad P V = \$ 42,931.03$

Question

Find the present value of an annuity with annual payments of $3,250 at 5.45%, compounded annually for 24 years.Round to the nearest cent. 
A) $\quad P V = \$ 42,961.75$
B) $\quad P V = \$ 40,799.07$
C) $\quad P V = \$ 82,251.00$
D) $\quad P V = \$ 42,946.39$
E) $\quad P V = \$ 42,931.03$

Quizplus · Accepted Answer

To find the present value of an annuity, we can use the formula:

PV = A * ((1 - (1 + r)^(-n)) / r)

where PV is the present value, A is the annual payment, r is the annual interest rate expressed as a decimal, and n is the number of years.

Plugging in the given values, we get:

PV = 3,250 * ((1 - (1 + 0.0545)^(-24)) / 0.0545)
PV ≈ $42,946.39

Therefore, the answer is D, with a present value of $42,946.39.

Find the Present Value of an Annuity with Annual Payments PV=$42,961.75\quad P V = \$ 42,961.75PV=$42,961.75

Find the Present Value of an Annuity with Annual Payments $\quad P V = \$ 42,961.75$