What's the Present Value of a 4-Year Ordinary Annuity of $2,250

question 106

Multiple Choice

What's the present value of a 4-year ordinary annuity of $2,250 per year plus an additional $3,000 at the end of Year 4 if the interest rate is 5%?

• A) $8,509
• B) $8,957
• C) $9,428
• D) $9,924
• E) $10,446

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Definitions:

Financial Difficulties

Financial difficulties are situations where an individual or entity is unable to meet financial obligations due to lack of resources, impacting their economic stability.

Residential Property

Property designated for living purposes, such as houses, apartments, condos, and other dwellings where individuals or families reside.

Mortgage

A legal agreement where a bank or lender lends money at interest in exchange for taking title of the debtor's property, with the condition that the conveyance of title becomes void upon the payment of the debt.

Partnership

A business entity legally established by two or more partners who equally share in managing the business and its profits.