You are comparing two annuities which offer quarterly payments of $2,500 for five years and pay 0.75
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Question:
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?
- Annuity A has a smaller future value than annuity B.
- These two annuities have equal present values but unequal futures values at the end of year five.
- These two annuities have equal present values as of today and equal future values at the end of year five.
- Annuity B is an annuity due.
- Annuity B has a smaller present value than annuity A.
Related Book For
Accounting Principles
ISBN: 978-0470533475
9th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
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