Use this information to answer the following question. $$\begin{array} { | c | c | c | }
\hline \text { Periods } & \text { Present Value af } \$ 1 \text { at } 7 \text { Percent } & \text { Present Value af Ordinary Annuity of } \
&&\text { \$1 at } 7 \text { Percent } \
1 & 0.935 & 0.935 \
\hline 2 & 0.873 & 1.808 \
\hline 3 & 0.816 & 2.624 \
\hline
\end{array}$$ What amount must be deposited today so that $600 may be withdrawn at the end of each year for three years?

Question

Use this information to answer the following question. $$\begin{array} { | c | c | c | } 
\hline \text { Periods } & \text { Present Value af } \$ 1 \text { at } 7 \text { Percent } & \text { Present Value af Ordinary Annuity of } \
&&\text { \$1 at } 7 \text { Percent } \
1 & 0.935 & 0.935 \
\hline 2 & 0.873 & 1.808 \
\hline 3 & 0.816 & 2.624 \
\hline
\end{array}$$ What amount must be deposited today so that $600 may be withdrawn at the end of each year for three years?

Quizplus · Accepted Answer

The present value of an ordinary annuity of $1 at 7% for 3 years is 2.624. To find the amount to be deposited today, multiply $600 by 2.624, which equals $1,574.40.

Use This Information to Answer the Following Question What Amount Must Be Deposited Today So That $600 May