The Interest Factor (IF) for the Future Value of an Ordinary

question 95

Multiple Choice

The interest factor (IF) for the future value of an ordinary annuity is 4.641 at 10% for four years. If we wish to accumulate $8,000 by the end of four years, how much should the annual payments be?

• A) $2,500
• B) $2,000
• C) $1,724
• D) $37,128

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Definitions:

Receivable Indicators

Metrics or signs used to assess the performance or status of accounts receivables within a company.

Interest Rate

The percentage of a sum of money charged for its use, often expressed annually.

Stated Rate

The interest rate declared on a bond or other loan by the issuer, also known as the nominal or coupon rate.

Money

A medium of exchange that facilitates trade and is used as a measure of value and a store of wealth.