The present value of an annuity factor at 8% for 10 years is 6.7101. This implies that an annuity of ten $15,000 payments at 8% yields a present value of $2,235.
$15,000 x 6.7101 = $100,651.50

Question

Quizplus · Accepted Answer

The present value of an annuity is calculated by multiplying the annuity payment by the present value annuity factor. The correct present value is $15,000 x 6.7101 = $100,651.50, not $2,235.

The Present Value of an Annuity Factor at 8% for 10