Tammy wants to buy a car that costs $10,000 and wishes to know the amount of the monthly payments, which will be made at the first of the month, with interest of 12% on the unpaid balance. She should use a table for the:
a. present value of 1.
b. present value of an ordinary annuity of 1.
c. present value of an annuity due of 1.
d. Future value of an annuity due of 1.
What Is An Annuity:
An annuity is a term in corporate finance which is related to a stream of equal cash flows that will continue for a given amount of years at a prescribed interest rate. The Annuity can be used in both a present value and future value context.
Answer and Explanation:
The answer is C.
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