If an amount 'R' is paid at the end of every year for 'n' years, then the net present value of the annuity at an interest rate of 'i' is

A) $${\text{R}}\left[ {\frac{{{{\left( {1 + {\text{i}}} \right)}^{\text{n}}} - 1}}{{\text{i}}}} \right]$$ B) $${\text{R}}\left[ {\frac{{{{\left( {1 + {\text{i}}} \right)}^{\text{n}}} - 1}}{{{\text{i}}{{\left( {1 + {\text{i}}} \right)}^{\text{n}}}}}} \right]$$ C) $${\text{R}}{\left( {1 + {\text{i}}} \right)^{\text{n}}}$$ D) $$\frac{{\text{R}}}{{{{\left( {1 + {\text{i}}} \right)}^{\text{n}}}}}$$

Answer & Solution

Correct Answer: Option B

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If an amount 'R' is paid at the end of every...

If an amount 'R' is paid at the end of every year for 'n' years, then the net present value of the annuity at an interest rate of 'i' is

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