Question: Present Value and Interest Rates [LO1]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 [LO1]What is the relationship between the value of an annuity and the level of interest rates? Suppose you just bought a 20-year annuity of 19,000 per year at the current interest rate of 8 per cent per year. What happens to the value of your investment if interest rates suddenly drop to 3 per cent? What if interest rates suddenly rise to 13 per cent?

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