What is the present value of an annuity due paying Rs. 1,000 at the beginning of each year for 3 years at 10% interest?
Correct answer: B. Rs. 2,735.54
- A. Rs. 2,486.85
- B. Rs. 2,735.54
- C. Rs. 3,000.00
- D. Rs. 3,310.00
Explanation
The present value of an annuity due equals the present value of an ordinary annuity multiplied by 1.10. Therefore, its value is 2,486.85 × 1.10 = Rs. 2,735.54.
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