Find the Present Value of an Annuity with Semiannual Payments $\quad P V = \$ 7,772.51$

question 36

Multiple Choice

Find the present value of an annuity with semiannual payments of $370 at 4.87%, compounded semiannually for 13 years.Round to the nearest cent.

• A) \(\quad P V = \$ 7,772.51\)
• B) \(\quad P V = \$ 13,207.68\)
• C) \(\quad P V = \$ 14,131.85\)
• D) \(\quad P V = \$ 9,854.25\)
• E) \(\quad P V = \$ 7,065.92\)

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Definitions:

Simple Rate of Return

A method to determine the efficiency of an investment, calculated by dividing the annual incremental net operating income by the initial investment's cost.

Investment Project

A project involving the allocation of resources with the expectation of future returns, such as profits or benefits.

Discount Factor(s)

Multipliers used in discounted cash flow (DCF) analyses to convert future cash flows into their present value, reflecting the time value of money.

Discount Rate

The discount rate applied to calculate the current value of future cash flows.