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QUESTION 13 PRESENT VALUE TABLES Table A: PV of $1 (Annuity) Table B: Present Value of $1 4% 5% 6% 7% 8% 9% 10% N 4% 5% 6% 7%
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Answer #1

Solution

Amount payable annually = $12000

Term (Years) = 4

Interest Rate = 5%

Therefore, Present Value of Annuity of $1 @5% for 4 Years = 3.55

Therefore, Present Value of Annual Payment = $12000 X 3.55
= $42600

Answer: Option (D) $42600

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