What is the present value of a $600 annuity payment over 4 years if interest rates are 6 percent?
A) $475.26
B) $757.49
C) $2,079.06
D) $3,145.28

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 annuity payment, r is the interest rate per period, and n is the number of periods. Plugging in the values: PV = $600 × [(1 - (1 + 0.06)^-4) / 0.06] = $2,079.06.

What Is the Present Value of a $600 Annuity Payment