An Annuity Is Set Up That Will Pay $1500 Per

question 6

Multiple Choice

An annuity is set up that will pay $1500 per year for ten years.What is the present value (PV) of this annuity given that the discount rate is 6%?

• A)$8441
• B)$11,040
• C)$14,721
• D)$19,771

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Definitions:

Fractions

Mathematical expressions representing parts of a whole or a ratio between two quantities.

Mixed Numbers

Numbers consisting of an integer and a fraction, representing quantities greater than one.

Lowest Terms

Refers to a fraction simplified to its smallest possible numerator and denominator without changing its value.

Improper Fractions

Fractions where the numerator (top number) is greater than or equal to the denominator (bottom number), resulting in a value greater than or equal to one.