Consider an annuity that pays $45,768 at the end of very year for the next 12 years.What is the value of the annuity at the end of the 12 year period if the discount rate is 2%?
A)$600,280.65
B)$612,637.43
C)$598,300.32
D)$200,250.23
E)$3,450,322.32

Question

Quizplus · Accepted Answer

We can solve this using the formula for the present value of an annuity:

PV = C * ((1 - (1 + r)^-n)/r)

Where PV is the present value, C is the annual payment, r is the discount rate, and n is the number of years. Plugging in the values, we get:

PV = 45,768 * ((1 - (1 + 0.02)^-12)/0.02)
PV = $612,637.43

Therefore, the best choice is B.

Consider an Annuity That Pays $45,768 at the End of Very