Find the present value of the ordinary annuity.
-Payments of $\$ 74$ made quarterly for 10 years at $5.7 \%$ compounded quarterly
A) $\$ 2244.38$
B) $\$ 2259.63$
C) $\$ 2279.94$
D) $\$ 2286.79$

Question

Quizplus · Accepted Answer

The correct answer is A because the present value of the ordinary annuity is calculated as follows:PV = PMT * [1 - (1 + r/n)^(-nt)] / (r/n)where:PMT = payment amount = $74r = annual interest rate = 5.7% = 0.057n = number of compounding periods per year = 4 (quarterly)t = number of years = 10PV = $74 * [1 - (1 + 0.057/4)^(-4*10)] / (0.057/4)= $74 * [1 - (1.01425)^(-40)] / 0.01425= $74 * [1 - 0.4595] / 0.01425= $74 * 0.5405 / 0.01425= $2244.38 (rounded to the nearest cent)

Find the Present Value of the Ordinary Annuity $74\$ 74$74 Made Quarterly for 10 Years At

Find the Present Value of the Ordinary Annuity $\$ 74$ Made Quarterly for 10 Years At