Estimate the Present Value of an Annuity If Payments Are

question 168

Multiple Choice

Estimate the present value of an annuity if payments are $500 monthly for 19 years and the account earns interest at the rate of 8% / year compounded continuously. Round your answer to the nearest dollar.

• A) $56,454
• B) $57,363
• C) $62,918
• D) $58,597

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Definitions:

Intra-Entity Asset Transfers

Transactions involving the transfer of assets or services between divisions or subsidiaries within the same entity, which may need to be adjusted for in consolidated financial reporting.

Depreciation Purposes

The allocation of the cost of an asset over its useful life for accounting and tax purposes.

Consolidation Worksheet

A tool used in accounting to combine the financial statements of a parent company with those of its subsidiaries, enabling a clearer overall financial picture.

Equity Method

An accounting technique used by companies to assess the profits earned by their investments in other companies, reflecting the profit share in their income statements.