What Is the Present Value of a 5-Year Ordinary Annuity

question 21

Multiple Choice

What is the present value of a 5-year ordinary annuity with annual payments of $200,evaluated at a 15 percent interest rate?

• A) $670.43
• B) $842.91
• C) $1,169.56
• D) $1,348.48
• E) $1,522.64

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Definitions:

Prestigious

Describes something or someone that is highly respected and admired for being successful or of high quality.

Contract Performance

Refers to the execution of the duties and obligations as outlined in a contract by the parties involved.

Breach of Condition

A breach of condition refers to the failure to meet a critical term of a contract, which can entitle the other party to terminate the agreement and seek damages.

Legal Tender

A form of money that under law must be accepted if offered in payment of debt.