What is the PV of an annuity due with 5 payments of $2,900 at an interest rate of 5.5%?
A) $14,502.08
B) $12,934.29
C) $13,064.94
D) $10,451.95
E) $11,758.44

Question

Quizplus · Accepted Answer

To find the PV of an annuity due, we need to use the formula:

PV = PMT x [(1 - (1 + r)^-n) / r] x (1 + r)

where PMT is the periodic payment, r is the interest rate per period, and n is the number of periods.

Substituting the given values, we get:

PV = 2,900 x [(1 - (1 + 0.055)^-5) / 0.055] x (1 + 0.055)
PV = 13,064.94

Therefore, the best choice is C.

What Is the PV of an Annuity Due with 5