If the present value annuity factor is 3.8896, what is the present value annuity factor for an equivalent annuity due if the interest rate is 9 percent?
A)3.5684
B)4.2397
C)3.8896
D)5.3127

Question

Quizplus · Accepted Answer

The present value annuity due factor is equal to the present value annuity factor multiplied by (1 + i), where i is the interest rate. Thus, the present value annuity due factor is 3.8896 × (1 + 0.09) = 4.2397. Therefore, the best choice is B.

If the Present Value Annuity Factor Is 3