The Present Value of an Annuity of $800,received at the End

question 68

Multiple Choice

The present value of an annuity of $800,received at the end of every month for 20 years,where the required rate of return is 6.5% per annum,compounded monthly,is:

• A) $33 366.03
• B) $43 367.94
• C) $107 300.02
• D) $192 000.00

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Definitions:

Income

The total money received by an individual or household from various sources like wages, investments, and benefits, over a specified period, often used to fund expenditures.

Price

The price one must pay to obtain a good, service, or asset.

Claret

A term often used in Britain to refer to red Bordeaux wine.

Utility Function

A representation of how individual preferences are ranked for different bundles of goods.