Suppose the present value of a 2-year ordinary annuity is $100.If the discount rate is 10%,what must be the annual cash flow?
A) $65.45
B) $82.64
C) $57.62
D) $53.78
E) $79.22

Question

Quizplus · Accepted Answer

PV = PMT × 11ea7fdb_fc1a_0352_a768_cbe7997f8caa_TB2902_11 PMT = PV / 11ea7fdb_fc1a_0353_a768_a3080e962220_TB2902_11 PMT = 100 / 11ea7fdb_fc1a_0354_a768_3baa2e29520f_TB2902_11 = $57.62
Using a financial calculator:
N = 2, I/Y = 10, PV = -100, FV = 0, cpt PMT = $57.62

Suppose the Present Value of a 2-Year Ordinary Annuity Is