What's the Present Value of a 4-Year Ordinary Annuity of $2,250

question 32

Multiple Choice

What's the present value of a 4-year ordinary annuity of $2,250 per year plus an additional $3,000 at the end of Year 4 if the interest rate is 5%?

• A)$8,956.56
• B)$9,427.96
• C)$9,924.17
• D)$10,446.50

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Definitions:

Adjusting Entry

These are journal entries made at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.

Bonds Pay Interest

A statement indicating that bond issuers periodically make interest payments to bondholders.

Semiannually

Refers to an event or action that occurs twice a year.

Sold Bonds

The act of a company or government issuing bonds to investors in exchange for capital, representing a long-term borrowing.