If the future value annuity factor at 10% and five years is 6.1051,calculate the equivalent present value annuity factor:
A)6.1051
B)3.7908
C)6.7156
D)4.8127

Question

Quizplus · Accepted Answer

The formula for finding the present value annuity factor is:
Present value annuity factor = Future value annuity factor / (1 + r)n
where r is the interest rate and n is the number of periods. 
Substituting the given values, we get:
Present value annuity factor = 6.1051 / (1 + 0.10)5 = 3.7908
Therefore, the correct answer is B.

If the Future Value Annuity Factor at 10% and Five