Find the present value of an annuity with annual payments of $3,680 at 5.55%, compounded annually for 25 years.Round to the nearest cent.
A) $\quad P V = \$ 49,123.31$
B) $\quad P V = \$ 97,106.00$
C) $\quad P V = \$ 49,167.22$
D) $\quad P V = \$ 49,079.40$
E) $\quad P V = \$ 46,667.14$

Question

Find the present value of an annuity with annual payments of $3,680 at 5.55%, compounded annually for 25 years.Round to the nearest cent. 
A) $\quad P V = \$ 49,123.31$
B) $\quad P V = \$ 97,106.00$
C) $\quad P V = \$ 49,167.22$
D) $\quad P V = \$ 49,079.40$
E) $\quad P V = \$ 46,667.14$

Quizplus · Accepted Answer

We can use the formula for the present value of an annuity: PV = PMT x ((1-(1+r)^(-n))/r), where PMT is the annual payment, r is the interest rate, and n is the number of years. Plugging in the values given, we get PV = 3680 x ((1-(1+0.0555)^(-25))/0.0555) = $49,123.31. Rounding to the nearest cent, the answer is A.

Find the Present Value of an Annuity with Annual Payments PV=$49,123.31\quad P V = \$ 49,123.31PV=$49,123.31

Find the Present Value of an Annuity with Annual Payments $\quad P V = \$ 49,123.31$