Question

What is the value today of receiving $4,500 at the end of each year for the next four years, assuming an interest rate of 12% compounded annually?

Answer 1

Answer: The correct answer should be: a. $118.

References: Solution: A = P(A/P , i, n)

A = 4,500(A/P, 1%, 48) = (4,500)(0.0263) = $118.35

(im sorry if im wrong)