Practice Present Value Of An Annuity (pva) (24.5.2)

Practise this section

9 questions

Flashcard drill
3 cards from this section. Quick, good the night before a test.
Exercise
6 questions · about 4 min · pass mark 70%. Hints available.
Sign up to start the exercise
Quiz
3 questions · about 2 min · pass mark 70%. Hints available.
Sign up to start the quiz

6 sample questions

Question 1.
What is PVA?
Show hintHide hint
Think about what 'present value' means.
Question 2.
What does PMT stand for in the PVA formula?
Show hintHide hint
Consider the amount you receive or pay at each interval.
3Question 3.
What does PVA stand for?
- Present Value of an Annuity
- Present Value of an Aggregate
- Present Value of All
Show hintHide hint
Think about the purpose of this concept.
4Question 4.
True or False: An annuity is always made at the beginning of each period.
- True
- False
Show hintHide hint
Recall the two types of annuities.
Question 5.
Determine the present value of an annuity that pays ₹15,000 at the end of each year for 10 years at an interest rate of 7%.
Show hintHide hint
Make sure to substitute correctly in the PVA formula.
Question 6.
How would you adjust your PMT if the interest rate increased to 9% but you still wanted the same PVA of ₹100,000?
Show hintHide hint
Think about how increasing the interest rate could decrease the required PMT.

5 more questions in this section. Enroll free to practise them all.