What is the eight-year present value annuity factor at a discount rate of 11%?
A)5.7122
B)11.8594
C)5.1461
D)6.9158

Question

Quizplus · Accepted Answer

The formula for present value annuity factor is:
PVAF = [(1-(1/(1+r)^n))/r]
where r is the discount rate and n is the number of periods.

In this case, r = 11% and n = 8.
So, PVAF = [(1-(1/(1+0.11)^8))/0.11] = 5.1461

Therefore, the eight-year present value annuity factor at a discount rate of 11% is 5.1461.

What Is the Eight-Year Present Value Annuity Factor at a Discount