Annuity A makes annual year-end payments of $976.50 for each of the next 10 years, while investment

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Annuity A makes annual year-end payments of $976.50 for each of the next 10 years, while investment B makes annual year-end payments of $600 per year forever. Show your work for the following two questions:

a. At what interest rate would you be indifferent between the two investments?

b. At interest rates above/below this break-even rate, which investment would you choose and why?

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Engineering Economy

ISBN: 978-0132554909

15th edition

Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

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Question Posted: May 23, 2013 04:45 AM

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Annuity A makes annual year-end payments of $976.50 for each of the next 10 years, while investment

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a Computation of the interest rate would you be indifferent between the two investments I...View the full answer

Engineering Economy

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