An annuity is set up that will pay $1500 per year for ten years.What is the present value (PV)of this annuity given that the discount rate is 6%?
A)$8441
B)$11,040
C)$14,721
D)$19,771

Question

Quizplus · Accepted Answer

The present value of an annuity can be calculated using the formula PV = Pmt × [(1 - (1 + r)^-n) / r], where Pmt is the annual payment, r is the discount rate, and n is the number of periods. Plugging in the values: PV = $1500 × [(1 - (1 + 0.06)^-10) / 0.06] = $11,040.

An Annuity Is Set Up That Will Pay $1500 Per