What would you be willing to pay today to receive $5,000 at the beginning of each year for the next 10 years if interest is earned at a rate of 8% compounded annually?
A)$34,656
B)$36,235
C)$33,551
D)$78,228

Question

Quizplus · Accepted Answer

The present value of an annuity formula is used to calculate the amount you would pay today to receive a series of future payments. Using the formula for the present value of an annuity, with a payment of $5,000, an interest rate of 8%, and 10 periods, the correct present value is approximately $36,235.

What Would You Be Willing to Pay Today to Receive