The Present Value of an Ordinary Annuity of $350 Each

question 94

Multiple Choice

The present value of an ordinary annuity of $350 each year for five years,assuming an opportunity cost of 4 percent,is: (Round to the nearest whole dollar)

• A) $288
• B) $1,896
• C) $1,750
• D) $1,558

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Definitions:

Future Payments

Payments that are scheduled to be made at a later date or period, often related to loans or financing arrangements.

Investment Privately

Allocating financial resources into private enterprises not listed on public stock exchanges.

Maximum Price

The highest price a buyer is willing to pay for a good, service, or financial instrument.

Non-Redeemable GICs

Guaranteed Investment Certificates that cannot be cashed in before their maturity date without incurring a penalty.