Johnson has an annuity due that pays $600 per year for 15 years. What is the present value of the cash flows if they are discounted at an annual rate of 7.50%?
A) $5,296.27
B) $5,693.49
C) $9,000.00
D) $9,675.00
Answer: B
Explanation: B)
PV = PMT × × (1 + r)1 = $600 × × (1.075)1 = $5,693.49.
MODE = BEGIN
INPUT 15 7.5 ? -600 0
KEY N I/Y PV PMT FV
CPT 5,693.49
Business
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