You are comparing two annuities which offer quarterly payments of $2,500 for five years and pay 0.75 percent interest per month. Annuity A will pay you on the first of each month while annuity B will pay you on the last day of each month. Which one of the following statements is correct concerning these two annuities? a. Annuity A has a smaller future value than annuity B. b. These two annuities have equal present values as of today and equal future values at the end of year five. c. These two annuities have equal present values but unequal futures values at the end of year five. d. Annuity B has a smaller present value than annuity A.
You are comparing two annuities which offer quarterly payments of $2,500 for five years and pay 0.75 percent interest per month. Annuity A will pay you on the first of each month while annuity B will pay you on the last day of each month. Which one of the following statements is correct concerning these two annuities? a. Annuity A has a smaller future value than annuity B. b. These two annuities have equal present values as of today and equal future values at the end of year five. c. These two annuities have equal present values but unequal futures values at the end of year five. d. Annuity B has a smaller present value than annuity A.
Algebra and Trigonometry (6th Edition)
6th Edition
ISBN:9780134463216
Author:Robert F. Blitzer
Publisher:Robert F. Blitzer
ChapterP: Prerequisites: Fundamental Concepts Of Algebra
Section: Chapter Questions
Problem 1MCCP: In Exercises 1-25, simplify the given expression or perform the indicated operation (and simplify,...
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You are comparing two annuities which offer quarterly payments of $2,500 for five years and pay 0.75 percent interest per month. Annuity A will pay you on the first of each month while annuity B will pay you on the last day of each month. Which one of the following statements is correct concerning these two annuities?
a. Annuity A has a smaller future value than annuity B.
b. These two annuities have equal present values as of today and equal future values at the end of year five.
c. These two annuities have equal present values but unequal futures values at the end of year five.
d. Annuity B has a smaller present value than annuity A.
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