The Present Value of an Annuity of $5,000 to Be

question 126

Multiple Choice

The present value of an annuity of $5,000 to be received at the end of each of the 6 years at a discount rate of 4% would be:

• A) $26,210
• B) $33,165
• C) $3,950
• D) none of the above

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Definitions:

Paid-In Capital

The total amount of money raised by a company through the sale of shares to the shareholders, including additional amounts over the nominal value.

Issue Price

The price at which new securities are sold to the public or investors by the issuer when they are first offered.

Par

The face value of a security as stated by its issuer, distinct from its market value.

Common Stock

A type of security that represents ownership in a corporation, with voting rights and potential for dividends.