Connor has $300,000 to invest in a 5-year annuity.Assuming the time value of money is 10%,what amount will Connor receive in cash each year? (Do not round your PV factors.Round your answer to the nearest dollar. )

Question

Quizplus · Accepted Answer

Net present value = Expected cash flow x PV factor
$300,000 = Expected cash flow x 3.790787
Expected cash flow = $300,000 ÷ 3.790787 = $79,139 (rounded)
PV factor from Appendix Table 1 (n = 5 and i = 10)

Connor Has $300,000 to Invest in a 5-Year Annuity