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    Consider an ordinary annuity whereby an investor is paid £1000 at the end of each year for 10 years. What is the present value of the annuity if annual interest rate is 6% per year?

    Is this just 1000(1.06)^10 = 1790.85?

    Surely if the investor is paid £1000 a year for a decade the annuity is going to be worth more than £1790.85?

    My result £7360.09: £1000[1 - (1 + 0.06) ^ -10]/(0.06) .

    hamza ahmad luton 786 hertfordshire hamzaahmad786

    (Original post by hamzaahmad786)

    My result £7360.09: £1000[1 - (1 + 0.06) ^ -10]/(0.06) .
    I got the exact same answer. But said answer would be different if maybe OP left out some aspect of the equation, like maybe, for example, if there is quarterly compounding
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