Answer:
The present value of a $100 three-year annuity due (first cash flow occurs today) discounted at a rate of 10% is equal to ________.
b. $248.69
Explanation:
a) Data and Calculations:
The amount of the Annuity due = $100
Number of years for the annuity due= 3
Discount rate of the annuity due = 10%
Annuity factor from annuity table = 2.4869
Therefore, the present value of the annuity due = $248.69 ($100 * 2.4869).
