Connor has $490,000 to invest in a 5-year annuity. Assuming the time value of money is 12%, what amount will Connor receive in cash each year?(PV of $1and PVA of $1) (Use appropriate factor(s) from the tables provided. Round your answer to the nearest dollar.)

Question

Quizplus · Accepted Answer

The present value of the annuity is $490,000. The future value of $1 received at the end of each year for 5 years at 12% is $5.65026. Therefore, the amount Connor will receive in cash each year is $490,000 / $5.65026 = $86,728.

Connor Has $490,000 to Invest in a 5-Year Annuity