Which of the following tables would show the smallest factor for an interest rate of 10% for six periods?
A) Future value of an ordinary annuity of 1
B) Present value of an ordinary annuity of 1
C) Future value of an annuity due of 1
D) Present value of an annuity due of 1

Question

Quizplus · Accepted Answer

The present value of an ordinary annuity of 1 would show the smallest factor for an interest rate of 10% for six periods. This is because the present value factor discounts the future cash flows back to their present value, and a smaller factor means less discounting and therefore a smaller present value.

Which of the Following Tables Would Show the Smallest Factor