Asked by Skyler Valantine on May 01, 2024
Verified
The present value of an annuity is simply the sum of the annuity's payments, traditionally made at the end of each of the time periods.
Present Value
The contemporary financial worth of a looming sum of money or sequence of cash flows, with a specific rate of return in mind.
Annuity's Payments
Regular fixed payments from an annuity contract, typically made to the holder for life or a specified period.
- Acquire knowledge on evaluating the present and future valuations of annuities and individual cash movements.
Verified Answer
ZK
Zybrea KnightMay 04, 2024
Final Answer :
False
Explanation :
The present value of an annuity is actually calculated by discounting the future payments back to their present value using an interest rate or discount rate.
Learning Objectives
- Acquire knowledge on evaluating the present and future valuations of annuities and individual cash movements.