What is the present value of $1,500 received for 24 months in arrears, followed by $1,200...

Question:

Present Value of an Annuity:

An annuity is an equal amount of money that is paid or received over several periods. The present value of an annuity is calculated based on the principle of time value of money. The expected cash flows are discounted to their present day worth at the stated interest time over the time period of the investment.

Answer and Explanation: 1