What Is the Present Value of a 5-Year Ordinary Annuity

question 93

Multiple Choice

What is the present value of a 5-year ordinary annuity with annual payments of $200,evaluated at a 15 percent interest rate?

• A) $670.43
• B) $842.41
• C) $1,169.56
• D) $1,348.48
• E) $1,522.64

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Definitions:

Real GDP

The measure of a country's economic output adjusted for price changes or inflation, providing a more accurate reflection of an economy's size and growth.

Annual Average Growth Rate

A percentage that shows the mean annual growth rate of an investment over a specified time period, assuming reinvestment of dividends and capital gains.

China

A country in East Asia, the world's most populous nation, with a vast landscape encompassing grassland, desert, mountains, lakes, rivers, and more than 14,000km of coastline.

Real GDP Per Person

The value of all final goods and services produced within a country in a year, adjusted for inflation, divided by the country's population.