Present and future value tables of $1 at 3% are presented below:

-On January 1, 2018, you are considering making an investment that will pay three annual payments of $10,000. The first payment is not expected until December 31, 2020. You are eager to earn 3%. What is the present value of the investment on January 1, 2018?
A) $26,662.
B) $27,462.
C) $28,286.
D) $29,135.

Question

Present and future value tables of $1 at 3% are presented below:

-On January 1, 2018, you are considering making an investment that will pay three annual payments of $10,000. The first payment is not expected until December 31, 2020. You are eager to earn 3%. What is the present value of the investment on January 1, 2018?
A) $26,662. 
B) $27,462. 
C) $28,286. 
D) $29,135.

Quizplus · Accepted Answer

PVA = $10,000 × (4.57971* - 1.91347**) = $26,662
*PVA of $1: n = 5; i = 3% **PVA of $1: n = 2; i = 3%

Present and Future Value Tables of $1 at 3% Are