Which of the following is greater (answers rounded to the nearest cent)?
A) An ordinary annuity of $100.00 per year for three years discounted at 10% per year
B) A present value of $248.69
C) A future value of $331.00 three years from today, given an interest rate of 10% per year
D) You would be indifferent to the three choices since they all have the same present value when using an interest rate of 10% per year.
Answer: D
Explanation: D) Each choice has a PV of $248.69.
PV = PMT × = $100 × = $248.69
PV = = = $248.69.
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