What is the present value of an ordinary annuity that pays $1,000 per year over each of the next twenty years if the discount rate is 10%? Round to the nearest whole dollar.
A) $8,364
B) $385
C) $424
D) $8,514
E) $1,537

Question

Quizplus · Accepted Answer

PV = PMT × 11ea7fdb_fc1a_c6b4_a768_ed8596c0fadd_TB2902_11 PV = 1,000 × 11ea7fdb_fc1a_c6b5_a768_8167e8316f9e_TB2902_11 = $8,513.56
Using a financial calculator:
N = 20, I/Y = 10, PMT = -1,000, FV = 0, cpt PV = $8,513.56

What Is the Present Value of an Ordinary Annuity That