2. You are comparing two annuities which offer monthly payments of $1,000 for five years and pay 1.0 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. Both annuities have the same future value as of ten years from today. B. Both annuities are of equal value today. C. Annuity B has a higher present value than annuity A D. Annuity B is an annuity due. E.Annuity A has a higher future value than annuity B.
2. You are comparing two annuities which offer monthly payments of $1,000 for five years and pay 1.0 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. Both annuities have the same future value as of ten years from today. B. Both annuities are of equal value today. C. Annuity B has a higher present value than annuity A D. Annuity B is an annuity due. E.Annuity A has a higher future value than annuity B.
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 8EA: You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how...
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2. You are comparing two
A. Both annuities have the same
B. Both annuities are of equal value today.
C. Annuity B has a higher present value than annuity A
D. Annuity B is an annuity due.
E.Annuity A has a higher future value than annuity B.
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