Question

Consider an ordinary annuity that has a regular payment of R and a per-term interest rate of r. The present value of the second payment of R is equal to: $R(1+r)^{-2}$ $R(1+r)^{-2} + R(1+r)^{-1}$ $R - Rr$ $\frac{R}{(1+r)^2}$

          Consider an ordinary annuity that has a regular payment of R and a per-term interest rate of r.
The present value of the second payment of R is equal to:
$R(1+r)^{-2}$
$R(1+r)^{-2} + R(1+r)^{-1}$
$R - Rr$
$\frac{R}{(1+r)^2}$

Added by Aurora C.

Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition

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Solved by Expert Liliane Martins

Step 1

An ordinary annuity is a series of equal payments made at the end of consecutive periods over a fixed length of time. The payments are typically made annually, semi-annually, quarterly, or monthly. Show more…

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Consider an ordinary annuity that has a regular payment of R and a per-term interest rate of r. The present value of the second payment of R is equal to: (R / (1+r)^2) + (R / (1+r)^1) + R