Final answer:
The present value interest factor for an annuity (PVIFA) represents the present value of a series of payments, given a certain interest rate and time period. To find it for an 8% rate over 20 years, use the PVIFA formula and compare the result to the provided options.
Step-by-step explanation:
The question concerns the calculation of the Present Value Interest Factor for an Annuity (PVIFA), which is a factor that reflects the present value of a series of annuity payments, given a certain interest rate and time period. To find the PVIFA for an annuity with an 8 percent interest rate over 20 years, we use the PVIFA formula:
PVIFA = (1 - (1 + r)^-n) / r
Where:
r is the periodic interest rate and n is the number of periods. For an 8 percent interest rate over 20 years, the calculation gives a result, which must then be compared to the options given (a. 9.8181, b. 7.0038, c. 11.4906, d. 10.2536) to find the correct answer. The exact calculation for this scenario requires the use of a financial calculator or appropriate software that provides the PVIFA figure.