What Is the Present Value of an Annuity of $12

question 122

Multiple Choice

What is the present value of an annuity of $12 received at the end of each year for seven years? Assume a discount rate of 11%.The first payment will be received one year from today (round to nearest $1) .

• A) $25
• B) $40
• C) $57
• D) $118

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Definitions:

Berries

Term used to describe small, pulpy, and often edible fruits, typically juicy, rounded, brightly colored, and having seeds.

Utility Function

A mathematical representation that ranks an individual's preferences over a set of goods and services, indicating levels of satisfaction.

Min Function

A mathematical function that identifies the smallest value from a set of numbers or inputs.

Income

The money received by an individual or business in exchange for providing labor, producing goods, or investing capital, over a certain period.