To calculate the present value of four annual installments of $1,000 at an 8% interest rate beginning on January 1, 2013 and payments due on December 31 of each year, one would use the present value of an ordinary annuity table.

Question

Quizplus · Accepted Answer

The present value of an ordinary annuity table is used to calculate the present value of a series of equal payments made at the end of each period, which is exactly what is described in the question. Therefore, the statement is true.

To Calculate the Present Value of Four Annual Installments of $1,000