Which formula calculates the present value of an annuity?

The formula that calculates the present value of an annuity is indeed represented as PV = C*(1-1/(1+r)^t)/r. This formula takes into consideration the cash flow amount, or the annuity payment (C), the discount rate (r), and the total number of periods (t) the annuity payments will occur.

The present value of an annuity formula is derived from the concept that an annuity consists of a series of equal payments made at regular intervals, discounted back to their present value. The term (1 - 1/(1+r)^t) represents the discounting effect of these future payments. It essentially captures the decreasing value of future cash flows compared to their value today, as money has the potential to earn returns when invested. Dividing by the rate (r) allows for a conversion of this future value back into today's value.

The other options involve variations that don't align with the standard present value of an annuity calculation. They may include terms for different types of cash flow calculations, but they do not represent the cumulative effect of discounting a series of equal future cash flows back to today, as the correct formula does.