The present value of an annuity of $5,000 to be received at the
beginning of each of the 6 years at a discount rate of 4% would
be:
| $26,210 |
| $27,258 |
| $3,950 |
| none of the above |
PV of Annuity = PV of Cfs from it.
| Year | CF | PVF @4% | Disc CF |
| 1 | $ 5,000.00 | 1.0000 | $ 5,000.00 |
| 2 | $ 5,000.00 | 0.9615 | $ 4,807.69 |
| 3 | $ 5,000.00 | 0.9246 | $ 4,622.78 |
| 4 | $ 5,000.00 | 0.8890 | $ 4,444.98 |
| 5 | $ 5,000.00 | 0.8548 | $ 4,274.02 |
| 6 | $ 5,000.00 | 0.8219 | $ 4,109.64 |
| PV of Annuity | $27,259.11 |
OPtion B is correct
Pls do rate, if the answer is correct and comment, if any further assistance is required
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