What is the formula for the present value of an ordinary annuity of 1? A) $\frac { ( 1 + i ) ^ { n - 1 } } { i }$ B) $\frac { 1 } { ( 1 + i ) ^ { n } }$ C) (1 + i)ⁿ D) $\frac { 1 - \left[ 1 / ( 1 + i ) ^ { n } \right] } { i }$

Question

Quizplus · Accepted Answer

The present value of an ordinary annuity is calculated using the formula $\frac { 1 - \left[ 1 / ( 1 + i ) ^ { n } \right] } { i }$, which accounts for the present value of a series of equal payments made at regular intervals.

What Is the Formula for the Present Value of an Ordinary