1. Which of the following should be used to calculate the amount of the equal periodic payments that could be equivalent to an outlay of $3000 at the time of the last payment?
a) Amount of 1
b) Amount of an annuity of 1
c) Present value of an annuity of 1
d) Present value of 1
(Please give reason for answer)
Answer : c) Present value of an annuity of 1
We can show this by way of an example
Let the outlay at time 0= $3,000
No of equal periodic ...
Answers a multiple choice question on Present Value.