If the present value annuity factor at 12% APR for 5 years is 3.6048, what is the equivalent future value annuity factor?
A) 2.0455
B) 6.3529
C) 1.7623
D) None of the above

Question

Quizplus · Accepted Answer

The formula for the future value annuity factor is:
Future value annuity factor = ((1+i)^n-1)/i
where i is the periodic interest rate and n is the number of periods.

Given i = 12%/12 = 1% and n = 5*12 = 60 periods
Present value annuity factor = ((1+i)^n - 1)/(i*(1+i)^n) = 3.6048

We can use this equation to solve for the future value annuity factor:
Future value annuity factor = (1+i)^n * Present value annuity factor
= (1.01)^60 * 3.6048
= 6.3529

Therefore, the answer is B.

If the Present Value Annuity Factor at 12% APR for 5