Ask Question
25 April, 21:27

An investment today of $8,424 at 6% will yield payments of $2,000 per year for five years, or total payments of $10,000 over five years. The reason for this increase is that the interest is being earned on principal that is left invested each year. true false

+4
Answers (1)
  1. 25 April, 21:59
    0
    True

    Explanation:

    In this question, we have to find out the present value which is shown below:

    = Annual payment * PVIFA for 5 years at 6 %

    = $2,000 * 4.2124

    = $8,424

    Refer to the PVIFA table

    Basically we multiply the annual payment with the PVIFA to allow the exact amount to arrive. The present value comes after taking the discount rate into account for the number of periods
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “An investment today of $8,424 at 6% will yield payments of $2,000 per year for five years, or total payments of $10,000 over five years. ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers