The present value of an annuity factor for six years at 10% is 4.3553.This means that the present value of an annuity of six annual $2,000 payments at 10% would equal $8,711.

Question

Quizplus · Accepted Answer

To calculate the present value of an annuity, we multiply the periodic payment (in this case, $2,000) by the annuity factor (in this case, 4.3553).

So, PV = $2,000 x 4.3553 = $8,710.60, which rounds to $8,711. Thus, the statement is true.

The Present Value of an Annuity Factor for Six Years