Annuity Due: Your Inheritance Will Pay You $100,000 a Year

question 81

Multiple Choice

Annuity due: Your inheritance will pay you $100,000 a year for five years beginning now. You can invest it in a bank account that will pay 7.75 per cent annually. What is the present value of your inheritance? (Round to the nearest dollar.)

• A) $399,356
• B) $401,916
• C) $433,064
• D) $467,812

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Definitions:

Ethical Behavior

Conduct that is consistent with what society, businesses, and individuals typically think are good values.

Fundamental Business

Refers to the basic concepts, principles, and practices that form the foundation of a company's operations and strategic objectives.

Financial Information

Data related to the financial performance and financial position of an entity, including income statements, balance sheets, and cash flow statements.

Owners' Equity

The residual interest in the assets of a business after deducting liabilities, essentially the ownership interest in the business.