The present value of an annuity of $11 000,received at the end of every year for ten years,where the required rate of return is 5.6% per annum,compounded annually,is:
A) $6379.01
B) $7051.28
C) $8251.76
D) $82 517.62

Question

Quizplus · Accepted Answer

The present value of an annuity can be calculated using the formula: PV = Pmt * [(1 - (1 + r)^-n) / r], where Pmt is the annuity payment, r is the interest rate, and n is the number of periods. Plugging in the values: PV = 11000 * [(1 - (1 + 0.056)^-10) / 0.056] gives approximately $82,517.62.

The Present Value of an Annuity of $11 000,received at the End