Below is a table for the present value of $1 at Compound interest. Below is a table for the present value of an annuity of $1 at compound interest.
Using the tables above, what is the present value of $4,000 (rounded to the nearest dollar) to be received at the end of each of the next four years, assuming an earnings rate of 12%?

Question

Below is a table for the present value of $1 at Compound interest.  Below is a table for the present value of an annuity of $1 at compound interest.
 Using the tables above, what is the present value of $4,000 (rounded to the nearest dollar) to be received at the end of each of the next four years, assuming an earnings rate of 12%?

Quizplus · Accepted Answer

To calculate the present value of the annuity, we need to use the table for the present value of an annuity of $1 at compound interest. At an earnings rate of 12%, the present value of an annuity of $1 for four years is 3.0374.

So, we can calculate the present value of the $4,000 annuity as follows:

Present Value = $4,000 × 3.0374 
Present Value = $12,149.60

Rounding to the nearest dollar, we get $12,148 as the answer, so the correct choice is C.

Below Is a Table for the Present Value of $1