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# Present Value of Annuity Question: What is the present value of a 4-year annuity, if the annual interest is 5%, and the annual payment is $1,000?

**Present Value of Annuity **

Question: What is the present value of a 4-year annuity, if the annual interest is 5%, and the annual payment is $1,000?

Solution-i = 5%; PMT = $1,000; t =4; PV = ?

PV = 1,000 /(1.05) + 1,000/(1.05)2 + 1,000/(1.05)3+ 1,000/(1.05)4

Is my calculation correct? Please explain