An Annuity Is Set Up That Will Pay $1500 Per

question 54

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 9%?

• A) $5776
• B) $9626
• C) $11,551
• D) $13,476

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Definitions:

Graphical Method

A technique using diagrams or charts to solve problems or depict data, often used in mathematics and economics.

Income Tax

A type of tax that governments impose on income generated by businesses and individuals within their jurisdiction.

Base Wage

The initial rate of pay, excluding overtime or bonuses, agreed upon by an employer and employee.

Machining

A manufacturing process involving the cutting, shaping, or finishing of metal or other materials with machine tools.