Compute the present value of an ordinary annuity that pays $13,000 per year for 15 years at 10%. Present value of ordinary annuity of $1:
$$\begin{array} { | l | l | l | l | l | l | }
\hline & 7 \% & 8 \% & 9 \% & 10 \% & 12 \% \
\hline 11 & 7.499 & 7.139 & 6.805 & 6.495 & 5.938 \
\hline 12 & 7.943 & 7.536 & 7.161 & 6.814 & 6.194 \
\hline 13 & 8.358 & 7.904 & 7.487 & 7.103 & 6.424 \
\hline 14 & 8.745 & 8.244 & 7.786 & 7.367 & 6.628 \
\hline 15 & 9.108 & 8.559 & 8.061 & 7.606 & 6.811 \
\hline
\end{array}$$
A) $98,878
B) $99,745
C) $97,578
D) $100,178

Question

Compute the present value of an ordinary annuity that pays $13,000 per year for 15 years at 10%. Present value of ordinary annuity of $1:
$$\begin{array} { | l | l | l | l | l | l | } 
\hline & 7 \% & 8 \% & 9 \% & 10 \% & 12 \% \
\hline 11 & 7.499 & 7.139 & 6.805 & 6.495 & 5.938 \
\hline 12 & 7.943 & 7.536 & 7.161 & 6.814 & 6.194 \
\hline 13 & 8.358 & 7.904 & 7.487 & 7.103 & 6.424 \
\hline 14 & 8.745 & 8.244 & 7.786 & 7.367 & 6.628 \
\hline 15 & 9.108 & 8.559 & 8.061 & 7.606 & 6.811 \
\hline
\end{array}$$
A) $98,878
B) $99,745
C) $97,578
D) $100,178

Quizplus · Accepted Answer

The present value of an ordinary annuity is calculated by multiplying the annuity payment by the present value factor. For 15 years at 10%, the factor is 7.606. Thus, $13,000 * 7.606 = $98,878.

Compute the Present Value of an Ordinary Annuity That Pays