Use these present value tables to answer the question that follow. Below is a ta

Question

Use these present value tables to answer the question that follow.

Below is a table for the present value of $1 at Compound interest.

Below is a table for the present value of an annuity of $1 at compound interest.

Using the tables above, what is the present value of $17,596.00 (rounded to the nearest dollar) to be received at the end of each of the next four years, assuming an earnings rate of 12%?

a.$53,439

b.$63,434

c.$17,596

d.$42,266

Year 6% 10% 12% 1 0.943 0.909 0.893 2 0.890 0.826 0.797 3 0.840 0.751 0.712 4 0.792 0.683 0.636 5 0.747 0.621 0.567

Explanation / Answer

Present value of annuity=Annuity[1-(1+interest rate)^-time period]/rate

=$17596[1-(1.12)^-4]/0.12

=$17596*3.037

which is equal to

=$53439(Approx).

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