What is the present value of an annuity of $100 received at the end of each year for seven years? The first payment will be received one year from today (round to nearest $10). The discount rate is 13%. To solve this problem with a financial calculator, the correct choice is
A) N=7, i=13, PMT= 100, FV=0, solve for PV.
B) N=7, i=13, PV= 100, FV=0, solve for FV.
C) N=7, i=13, PMT= 100, FV=100, solve for PV.
D) N=7, i=.13, PMT= 100, FV=0, solve for PV.

Question

Quizplus · Accepted Answer

To find the present value of an annuity, we need to use the PV function on a financial calculator. The inputs for this function require us to know the number of periods (N), the interest rate per period (i), the payment per period (PMT), and the future value (FV). Since we are given the payment per period and the interest rate, we can use Choice A to solve for the present value (PV).

What Is the Present Value of an Annuity of $100