On January 1, 2009, You Are Considering Making an Investment

Multiple Choice

On January 1, 2009, you are considering making an investment that will pay three annual payments of $10,000. The first payment is not expected until December 31, 2011. You are eager to earn 3%. What is the present value of the investment on January 1, 2009?

A) $26,662.
B) $27,462.
C) $28,286.
D) $29,135.PVA = $10,000 x ( 4.57971* - 1.91347**) = $26,662 *PVA of $1: n=5; i=3% **PVA of $1: n=2; i=3%