The present value of a $100 annuity deposited for 10 years at 10% is $1,593.74.

Question

Quizplus · Accepted Answer

The present value of an annuity is calculated using the formula PV = P * [(1 - (1 + r)^-n) / r], where P is the payment amount, r is the interest rate per period, and n is the number of periods. For a $100 annuity deposited for 10 years at 10%, the present value would not be $1,593.74; it would actually be lower, considering the formula accounts for the discounting effect of future payments back to their present value at the specified rate.

The Present Value of a $100 Annuity Deposited for 10