What Is the Present Value of a Five Period Annuity

question 61

Multiple Choice

What is the present value of a five period annuity of $3,000 if the interest rate is 12 percent and the first payment is made today?

• A)$9,655.65
• B)$10,814.33
• C)$12,112.05
• D)$13,200.00 PV = 3,000

---

Definitions:

Tax-Transfer Activities

Government actions involving the collection of taxes and redistribution of income through spending and transfers to achieve economic objectives.

Opportunity Costs

The loss of potential gain from other alternatives when one alternative is chosen, representing the cost of forgone options.

Goods And Services

The physical items (goods) and activities (services) that satisfy human wants or needs and are available for purchase.

Resources

Materials, money, staff, and other assets that can be drawn on by a person or organization in order to function effectively.