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Vladimir [108]
3 years ago
12

What's the present value of a 4-year ordinary annuity of $2,250 per year plus an additional $3,000 at the end of Year 4 if the i

nterest rate is 5%? Select one: a. $9,428 b. $10,446 c. $8,509 d. $8,957
Business
1 answer:
jarptica [38.1K]3 years ago
3 0

Answer:

The correct answer is B.

Explanation:

Giving the following information:

Cash flow= $2,250

n= 4

i= 5%

Additional investment= $3,000

<u>First, we need to calculate the future value using the following formula:</u>

FV= {A*[(1+i)^n-1]}/i

A= annual deposit

FV= {2,250*[(1.05^4) - 1]} / 0.05

FV= 9,697.78 + 3,000

FV= $12,697.78

<u>Now, the present value:</u>

PV= FV/(1+i)^n

PV= 12,697.78/(1.05^4)

PV= $10,446.5

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The USPS website can therefore confidently claim that at some point or the other, all three names mentioned above used to work for them.

In conclusion, the correct answer is the USPS.

<em>Find out more about the </em><em>USPS </em><em>at brainly.com/question/910319. </em>

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