# Calculate and rank the economic values of the following cash flow streams: (i) A single payment of

## Question:

(i) A single payment of $10,000 eight years from now. (ii) An annuity due starting today with eight annual payments of $850.

(iii) An annuity due starting in eight years with eight annual payments of $1700. Do the calculations and ranking for each of two cases:

a. Money can earn 8% compounded annually for the next 16 years.

b. Moneycanearn10%compoundedannuallyforthenext16years.

Annuity

An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,...

Fantastic news! We've Found the answer you've been seeking!

## Step by Step Answer:

**Related Book For**