Your grandfather has promised to give you $500 a year at the end of each of the next four years if you earn Cs or better in all of your courses each year. Using a discount rate of 7%, which of the folowing is correct for determining the present value of the gift?
a. PV = $500 x 7% x 4
b. PV = $500 x (PV factor, i = 4%, n=7)
c. PV = $500 x (Annuity FV factor, i = 7%, n = 4)
d. PV = $500 x (Annuity PV factor, i = 7%, n = 4)
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