To Compute the Present Value of $1,000 Annuity Received at the End

question 85

Multiple Choice

To compute the present value of $1,000 annuity received at the end of each of the next three years and discounted at the rate of 5% per year, you should enter the following variables into a financial calculator

• A) N=1, i=5, PMT=3000
• B) N=3, i=5, FV=3000
• C) N=3, i=5, PMT=1000
• D) N=3, i=15, PMT=1000

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Definitions:

Negative

In mathematics and statistics, it refers to a value less than zero.

Strong

Having high physical power, durability, or intensity; often used to describe materials or individuals.

Tired

The state of feeling a need for rest or sleep due to exhaustion.

Linear Association

A relationship between two variables that can be represented by a straight line when plotted on a graph.