Baxter Desires to Purchase an Annuity on January 1, 2019

Multiple Choice

Baxter desires to purchase an annuity on January 1, 2019, that yields him five annual cash flows of $19,000 each, with the first cash flow to be received on January 1, 2022. The interest rate is 10% compounded annually. The cost (present value) of the annuity on January 1, 2019, is ________. (Use spreadsheet software or a financial calculator to calculate your answer. Round intermediary calculations two decimal places and round your final answer to the nearest dollar.)

A) $49,194
B) $95,000
C) $59,525
D) $79,227