What Is the Present Value of a Five-Period Annuity of $3,000

question 49

Multiple Choice

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

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

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Definitions:

Identical

Refers to being exactly the same in every detail.

Valid Contract

A legal agreement that meets all the required elements, making it enforceable by law.

Effective Upon Dispatch

A legal principle where certain acts, such as sending a notification, are considered effective when they are dispatched, not when they are received.

Reasonable Period

An ambiguous span of time that is fair and appropriate under the circumstances, often used in contract and employment law.