If the present value annuity factor at 12% for five years is 3.6048,what is the equivalent future value annuity factor?
A)2.0455
B)6.3529
C)1.7623
D)5.1237

Question

Quizplus · Accepted Answer

To find the equivalent future value annuity factor, we need to use the formula:
Future Value Annuity Factor = (1 + r)^n / Present Value Annuity Factor
where r is the interest rate and n is the number of periods.
Substituting the given values, we get:
Future Value Annuity Factor = (1 + 0.12)^5 / 3.6048
= 1.7623
Therefore, the equivalent future value annuity factor is 1.7623.
Option B is the closest choice to this value, so it is the best choice.

If the Present Value Annuity Factor at 12% for Five