Question
Your rich aunt has promised to give you $2,000 a year at the end of each of the next four years to help you pay
Your rich aunt has promised to give you $2,000 a year at the end of each of the next four years to help you pay for college. Using a discount rate of 12%, the present value of the gift can be stated as
A.
PV=$2,000 (Annuity PVfactor, i= 12%, n= 4).
B.
PV= $2,000 x 12% x 4.
C.
PV= $2,000 (PV factor, i= 4%, n=12).
D.
PV= $2,000 (Annuity FVfactor, i= 12%, n= 4).
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Accounting Chapters 1-13
Authors: Carl Warren
27th Edition
1337272108, 978-1337272100
