An annuity consists of ten payments, each equal to $1000 - HSC - SSCE Mathematics Standard - Question 14 - 2020 - Paper 1

This statement is true. The present value of an annuity represents the total value today of a series of future cash flows, discounted at the rate of interest. Given that the rate of compound interest is 5% per annum, the present value will be less than the future value since the future cash flows accumulate over time. Hence, it logically follows that the present value would be less than $10,000 if calculated, and the future value, when all payments are considered at the end of the payment period, would exceed$10,000.