:

Fadey is trying to decided between two different annuities. He wants to know which of the two annuities will require the lowest investment will allow him to withdrawal $12,5000 every six months?

A) Annuity A will make the payments at the beginning of every six months for the next 9 years and the interest rate will be 5.20% compounded semi-annually.

End/Beg

P/Y

C/Y

N

I/Y

PV

PMT

FV

Fadey is trying to decided between two different annuities. He wants to know which of the two annuities will require the lowest investment will allow him to withdrawal $12,5000 every six months?

B) Annuity B will make the payments at the beginning of every six months for the next 9 years and the interest rate will be 5.20% compounded quarterly.

End/Beg

P/Y

C/Y

N

I/Y

PV

PMT

FV

Which annuity has the lowest investment for Fadey?

Please solve with BA II Plus Texas instrument calculator