Multiple Choice Question Which of the following would most likely be the present value of an annuity factor? O 0.75131 O 2.486000 O 0.90909

To determine which of the given options is most likely to be the present value of an annuity factor, we need to understand what an annuity factor represents. The present value of an annuity factor is calculated using the formula: \[ PV = \frac{1 - (1 + r)^{-n}}{r} \] where: - \(PV\) is the present value of the annuity, - \(r\) is the interest rate per period, - \(n\) is the number of periods. The present value of an annuity factor will typically be a value less than 1 when the interest rate is positive and the number of periods is finite. This is because the present value reflects the decreasing value of future cash flows. Now, let's analyze the options: 1. **0.75131**: This value is less than 1, which is consistent with the present value of an annuity factor for a positive interest rate. 2. **2.486000**: This value is greater than 1, which is not typical for a present value of an annuity factor. 3. **0.90909**: This value is also less than 1, which is consistent with the present value of an annuity factor for a positive interest rate. Based on this analysis, both 0.75131 and 0.90909 could be present values of annuity factors, but 0.75131 is more likely to represent a present value of an annuity factor for a higher interest rate or fewer periods. Thus, the most likely present value of an annuity factor from the given options is: **0.75131**.