What is the formula for the present value of an annuity when a payment of R is made at the end of each year for n years, given an interest rate of i?

Plant-Economics MCQs for PPSC, FPSC, NTS, and Pakistan government job tests. Select an option below, then read the explanation.

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Subject
Plant-Economicschemical-engineering › plant-economics
Published
12 Feb 2019
Last updated
28 May 2026

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Explanation

The present value of an annuity with payments of R at the end of each year for n years at an interest rate i is calculated using the formula: R × [((1 + i)^n - 1) / i]. This formula accounts for the time value of money by discounting each payment back to the present.

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