If the present value annuity factor at 12 percent for five years is 3.6048, what is the equivalent future value annuity factor?
A)2.0455
B)6.3529
C)1.7623
D)5.1237

Question

Quizplus · Accepted Answer

To find the equivalent future value annuity factor, we use the formula:
FVAF = (1+r)^n - 1 / r
where r is the interest rate and n is the number of periods.
Therefore, FVAF = (1+0.12)^5 -1 / 0.12 = 6.3529 (rounded to four decimal places).
Thus, the best choice is B.

If the Present Value Annuity Factor at 12 Percent for Five