If the present value annuity factor for 10 years at 10% interest rate is 6.1446, what is the present value annuity factor for an equivalent annuity due?
A) 6.1446
B) 7.38
C) 6.759
D) None of the above

Question

Quizplus · Accepted Answer

The present value annuity factor for an equivalent annuity due is simply the present value annuity factor multiplied by (1+i), where i is the interest rate per period. In this case, the interest rate is 10%, which means the interest rate per period is also 10%. Therefore, the present value annuity factor for an equivalent annuity due is 6.1446 x (1+0.1) = 6.759.

If the Present Value Annuity Factor for 10 Years at 10