What is the PV of an ordinary annuity with 5 payments of $6,200 if the appropriate interest rate is 4.5%?
A) $30,484.00
B) $22,863.00
C) $30,211.82
D) $27,217.86
E) $21,502.11

Question

Quizplus · Accepted Answer

The present value (PV) of an ordinary annuity can be calculated using the formula: PV = Pmt * [(1 - (1 + r)^-n) / r], where Pmt is the payment amount, r is the interest rate per period, and n is the number of periods. Plugging in the values: PV = $6,200 * [(1 - (1 + 0.045)^-5) / 0.045] = $27,217.86.

What Is the PV of an Ordinary Annuity with 5