Present and future value tables of $1 at 3% are presented below:

-On January 1, 2018, you are considering making an investment that will pay three annual payments of $10,000. The first payment is not expected until December 31, 2021. You are eager to earn 3%. What is the present value of the investment on January 1, 2018?
A) $28,286.
B) $25,886.
C) $26,662.
D) $27,300.

Question

Present and future value tables of $1 at 3% are presented below:

-On January 1, 2018, you are considering making an investment that will pay three annual payments of $10,000. The first payment is not expected until December 31, 2021. You are eager to earn 3%. What is the present value of the investment on January 1, 2018?
A) $28,286. 
B) $25,886. 
C) $26,662. 
D) $27,300.

Quizplus · Accepted Answer

PVA = $10,000 × (5.41719* - 2.82861**) = $25,886
*PVA of $1: n = 6; i = 3% **PVA of $1: n = 3; i = 3%

Present and Future Value Tables of $1 at 3% Are