Question
Which of the following statements is correct when talking about a 5-year annuity that pays $100 each year? A. The present value of this 5-year
Which of the following statements is correct when talking about a 5-year annuity that pays $100 each year?
A. The present value of this 5-year annuity is the difference between (a) the present value of a perpetuity paying $100 each year starting in 1 year, and (b) the present value of a perpetuity paying $100 each year starting in year 5.
B. The present value of this 5-year annuity is the difference between (a) the present value of a perpetuity paying $100 each year starting in 1 year, and (b) the present value of a perpetuity paying $100 each year starting in year 6.
C. The present value of this 5-year annuity is the difference between (a) the present value of a perpetuity paying $100 each year starting today, and (b) the present value of a perpetuity paying $100 each year starting in year 6.
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Business Mathematics
Authors: Gary Clendenen, Stanley A Salzman, Charles D Miller
12th Edition
0135109787, 9780135109786
