The present value of a deferred annuity (e.g.,an annuity that starts 10 years from today)can be calculated in two steps: (1)calculate the future value of the annuity,and (2)calculate the present value of the amount determined in step (1).

Question

Quizplus · Accepted Answer

The present value of a deferred annuity is calculated by first finding the future value of the annuity and then discounting that amount back to the present using the appropriate discount rate.

The Present Value of a Deferred Annuity (E