When using a present value of an annuity table (e.g., Table IV at the back of the book),
A)payments are assumed to be made at the beginning of each period
B)PVIFA factors decrease with an increase in the interest rate
C)PVIFA factors increase with an increase in the number of periods
D)b and c only

Question

Quizplus · Accepted Answer

Option A is incorrect because the table assumes payments are made at the end of each period. Option B is also incorrect because PVIFA factors increase with an increase in the interest rate. Option C is incorrect because PVIFA factors decrease with an increase in the number of periods. Therefore, Options B and C are incorrect while both b and c are correct.

When Using a Present Value of an Annuity Table (E