IB skill practice

Use annuity present value

Calculate the present value of a regular payment stream.

Paper 1, Paper 2 5 marks Difficulty 5

Use annuity present value - exam scenario

A training college receives 1420 at the end of each year for 8 years. At annual rate 5.5%, find the present value of the annuity. Enter the requested value and choose the interpretation that matches the result.

Worked practice: result and interpretation

Calculate the requested result first, then choose the interpretation that follows from it.