You have an annuity of equal annual end-of-the-year cash flows of $500 that begin two years from today and last for a total of ten cash flows. Using a discount rate of 4%, what are those cash flows worth in today's dollars?
A) $3,899.47
B) $4,055.45
C) $4,380.24
D) $5,000.00
Answer: A
Explanation: A)
PV = PMT × all divided by (1 + r)1 = $500 × /(1.04)1 = $3,899.47
MODE = END
INPUT 10 2 ? -500 0
KEY N I/Y PV PMT FV
CPT 3,899.47
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