Your grandmother has promised to give you $5,000 a year at the end of each of the next four years if you earn Cs or better in all of your courses each year. Using a discount rate of eight percent, which of the following is correct for determining the present value of the gift? PV = Annuity($5,000, i = 8%, n=4) PV = $5,000 x (Annuity PV factor, i = 4%, n = 8) PV = $5,000 x (Annuity FV factor, i = 8%, n = 4) PV = $5,000 x (Annuity PV factor, i = 8%, n = 4)
Your grandmother has promised to give you $5,000 a year at the end of each of the next four years if you earn Cs or better in all of your courses each year. Using a discount rate of eight percent, which of the following is correct for determining the present value of the gift? PV = Annuity($5,000, i = 8%, n=4) PV = $5,000 x (Annuity PV factor, i = 4%, n = 8) PV = $5,000 x (Annuity FV factor, i = 8%, n = 4) PV = $5,000 x (Annuity PV factor, i = 8%, n = 4)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Your grandmother has promised to give you $5,000 a year at the end of each of the next four
years if you earn Cs or better in all of your courses each year. Using a discount rate of eight
percent, which of the following is correct for determining the present value of the gift?
PV = Annuity($5,000, i = 8%, n=4)
PV = $5,000 x (Annuity PV factor, i = 4%, n = 8)
O PV = $5,000 x (Annuity FV factor, i = 8%, n = 4)
OPV = $5,000 x (Annuity PV factor, i = 8%, n = 4)
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