On May 1, 2019, a company purchased a new machine that it does not have to pay

Question:

On May 1, 2019, a company purchased a new machine that it does not have to pay for until May 1, 2021. The total payment on May 1, 2021, will include both principal and interest. Assuming interest at a 10% rate, the cost of the machine would be the total payment multiplied by what time value of money concept?

a. Future value of annuity of 1
b. Future value of 1
c. Present value of annuity of 1
d. Present value of 1

Annuity
An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,... Future Value
Future value (FV) is the value of a current asset at a future date based on an assumed rate of growth. The future value (FV) is important to investors and financial planners as they use it to estimate how much an investment made today will be worth...

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