Asked by Caitlyn Christy on Jun 14, 2024
Verified
The present value of an annuity factor for 6 years at 10% is 4.3553. This implies that an annuity of six $2,000 payments at 10% would equal $8,710.60.
Present Value
The current worth of a future sum of money or stream of cash flows, given a specified rate of return.
- Understand the principles of present value and their application in financial decision-making.
Verified Answer
AS
Abdul SameerJun 16, 2024
Final Answer :
True
Explanation :
The present value of an annuity factor is used to calculate the present value of a series of future cash flows. In this case, the present value of an annuity factor for 6 years at 10% is 4.3553, which means that the present value of six $2,000 payments at 10% is $8,710.60. Therefore, the statement is true.
Learning Objectives
- Understand the principles of present value and their application in financial decision-making.