Question: Present Value and Interest Rates what is the relationship between the value of an annuity and the level of interest rates? Suppose you just bought

Present Value and Interest Rates what is the relationship between the value of an annuity and the level of interest rates? Suppose you just bought a 10-year annuity of $7,000 per year at the current interest rate of 10 percent per year. What happens to the value of your investment if interest rates suddenly drop to 5 percent? What if interest rates suddenly rise to 15 percent?

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