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Using the Following Table, Determine the Present Value of an Annuity

question 4

Multiple Choice

Using the following table, determine the present value of an annuity of $50,0000 to be received at the end of each of five years at 6 percent interest.
Present value of an annuity of $1 at compound interest:
 Periods4.0%4.5%5.0%5.5%6.0%6.5%7.0%10.%11.0%12.0%13.0%0.9610.9560.9520.9470.9430.9380.9340.9090.9000.8920.884154943887409758099086961.8861.8721.8591.8461.8331.8201.8081.7351.7121.6901.668209674132396302545205102.7752.7482.7232.6972.6732.6482.6242.4862.4432.4012.361309962593014832857183153.6293.5873.5453.5053.4653.4253.3873.1693.1023.0372.974490539515118021874535474.4514.3894.3294.2704.2124.1554.1003.7903.6953.6043.517582984828366820799078235.2425.1575.0754.9954.9174.8414.7664.3554.2304.1113.997614876953320154265441556.0025.8925.7865.6825.5825.4845.3894.8684.7124.5634.422705703797385229422076616.7326.5956.4636.3346.2096.0885.9715.3345.1464.9674.798874892157797530931264777.4357.2687.1076.9526.8016.6566.5155.7595.5375.3285.131933798220691023020525668.1107.9127.7217.5377.3607.1887.0236.1445.8895.6505.426109072736309835857232224\begin{array}{ccccccc}\text { Periods}&\mathbf{4 . 0 \%} & \mathbf{4 . 5 \%} & \mathbf{5 . 0 \%} & \mathbf{5 . 5 \%} & \mathbf{6 . 0 \%} & \mathbf{6 . 5 \%} & \mathbf{7 . 0 \%}&10.\%&11.0\%&12.0\%&13.0\% \\&0.961 & 0.956 & 0.952 & 0.947 & 0.943 & 0.938 & 0.934 & 0.909 & 0.900 & 0.892 & 0.884 \\1&54 & 94 & 38 & 87 & 40 & 97 & 58 & 09 & 90 & 86 & 96\\&1.886 & 1.872 & 1.859 & 1.846 & 1.833 & 1.820 & 1.808 & 1.735 & 1.712 & 1.690 & 1.668 \\2&09 & 67 & 41 & 32 & 39 & 63 & 02 & 54 & 52 & 05 & 10\\&2.775 & 2.748 & 2.723 & 2.697 & 2.673 & 2.648 & 2.624 & 2.486 & 2.443 & 2.401 & 2.361 \\3&09 & 96 & 25 & 93 & 01 & 48 & 32 & 85 & 71 & 83 & 15\\&3.629 & 3.587 & 3.545 & 3.505 & 3.465 & 3.425 & 3.387 & 3.169 & 3.102 & 3.037 & 2.974 \\4&90 & 53 & 95 & 15 & 11 & 80 & 21 & 87 & 45 & 35 & 47\\&4.451 & 4.389 & 4.329 & 4.270 & 4.212 & 4.155 & 4.100 & 3.790 & 3.695 & 3.604 & 3.517 \\5&82 & 98 & 48 & 28 & 36 & 68 & 20 & 79 & 90 & 78 & 23\\&5.242 & 5.157 & 5.075 & 4.995 & 4.917 & 4.841 & 4.766 & 4.355 & 4.230 & 4.111 & 3.997 \\6&14 & 87 & 69 & 53 & 32 & 01 & 54 & 26 & 54 & 41 & 55\\&6.002 & 5.892 & 5.786 & 5.682 & 5.582 & 5.484 & 5.389 & 4.868 & 4.712 & 4.563 & 4.422 \\7&05 & 70 & 37 & 97 & 38 & 52 & 29 & 42 & 20 & 76 & 61\\&6.732 & 6.595 & 6.463 & 6.334 & 6.209 & 6.088 & 5.971 & 5.334 & 5.146 & 4.967 & 4.798 \\8&74 & 89 & 21 & 57 & 79 & 75 & 30 & 93 & 12 & 64 & 77\\&7.435 & 7.268 & 7.107 & 6.952 & 6.801 & 6.656 & 6.515 & 5.759 & 5.537 & 5.328 & 5.131 \\9&33 & 79 & 82 & 20 & 69 & 10 & 23 & 02 & 05 & 25 & 66\\&8.110 & 7.912 & 7.721 & 7.537 & 7.360 & 7.188 & 7.023 & 6.144 & 5.889 & 5.650 & 5.426 \\10&90 & 72 & 73 & 63 & 09 & 83 & 58 & 57 & 23 & 22 & 24\end{array}


Definitions:

Spending Variance

This is the difference between the actual amount spent on a budget item and its planned or budgeted amount.

Wages And Salaries

Compensation paid to employees for their work or services.

Planning Budget

A financial plan that estimates the revenue and expenses for a specific period in the future.

Births

The occurrence of being born; the start of life as a physically separate being.

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