Author Question: Your grandmother has promised to give you $2,000 a year at the end of each of the next four years if ... (Read 43 times)

OSWALD · **on:** Jan 5, 2020

Your grandmother has promised to give you $2,000 a year at the end of each of the next four years if you earn Cs or better in all of your courses each year. Using a discount rate of 8%, which of the following is correct for determining the present value of the gift?
◦ PV = $2,000 × (Annuity PV factor, i = 8%, n = 4)
◦ PV = $2,000 × 8% × 4
◦ PV = $2,000 × (PV factor, i = 4%, n = 8)
◦ PV = $2,000 × (Annuity FV factor, i = 8%, n = 4)

HandsomeMarc · **Reply #1 on:** Jan 5, 2020

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