The present value of $500 per period at 10% per period for three periods is $375.50.

Question

Quizplus · Accepted Answer

The present value of an annuity (a series of equal payments) can be calculated using the formula PV = P * [(1 - (1 + r)^-n) / r], where P is the payment per period, r is the interest rate per period, and n is the number of periods. For $500 per period at 10% for three periods, the calculation is $500 * [(1 - (1 + 0.10)^-3) / 0.10], which does not equal $375.50.

The Present Value of $500 Per Period at 10% Per