Question: What will be the difference in the present values of the two annuities below if the annual interest rate is 8% : 1. Annuity A

What will be the difference in the present values of the

What will be the difference in the present values of the two annuities below if the annual interest rate is 8% : 1. Annuity A will pay $100,000 at each year-end over the next 20 years 2. Annuity B will pay $100,000 at the start of each year over the next 20 years a) $78,545.18 b) $84,828.79 c) $104,312.48 d) $0 e) None of the above

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

What will be an annuity's price today if it will pay $2,000 at each year-end over the next 5 years? The annual interest rate is 8%. a) $8,624.25 b) $10,000 c) $14,693.28 d) $2,938.60 e) None of the...

Q1) What will be the difference in the present values of the two annuities below if the annual interest rate is 8%: Annuity A will pay $100,000 at each year-end over the next 20 years Annuity B will...

9. One bank will pay you 5.4% interest compounded annually. If you invest $1000 today, what simple interest rate would you need to earn at a competing bank to have the same amount of money in 5...

x The Correct answer is bold, please show the steps to solve each question. 8. Houses generally go up in value, cars generally go down in value. If you buy a car for $30,000 today and it decreases in...

B DE Enter your name in this box F G H ANN L M N 5 6 Tutorial 6 - Calculating Loan Payments and Loan Amortization You will determine the loan payment and amortization schedule fee a fixed rate loan...

please help thank you Consider an ordinary annuity that pays out over 6 as well as an annuity due that also pays out over 6 periods. Assume that each of these annuities has the same interest rate....

HEALTHCARE FINANCIAL MANAGEMENT Chapter 9 -- Time Value Analysis PROBLEM 1 Find the following values for a lump sum assuming annual, semiannual, and quarterly compounding: ANSWER Amount Annual...

Future Value: The future value of the deposit after 5 years can be calculated using the formula: FV = PV x (1 + r)^n Where: PV = $2,000,000 (the present value or initial deposit) r = 6% (the annual...

You have the opportunity to invest in several annuities. Which of the following 10-year annuities has the greatest present value (PV)? Assume that all annuities earn the same positive interest rate....

please help with the formulas needed to answer the steps in the first picture. 3. On the Loon Terms worksheet calculate how quickly you could pay off the loan if you increased the monthly payment. a....

What is the difference between a non-compensatory and a compensatory decision rule? Give one example of each.

A four-cylinder two-stroke engine operating at 2000 rpm produces 50 kW of total brake power. If the cylinder displacement is 1 L, determine (a) The net work output in kJ per cylinder per cycle, (b)...

EXERCISE I ( 4 points ) 1 year = 3 6 5 days TEST Today, 2 7 November 2 0 2 1 , a company discounts the following invoices EUR 3 5 , 0 0 0 due 2 0 February 2 0 2 2 EUR 2 4 , 0 0 0 due 2 3 December 2 0...

A company is preparing completing their Cash Budget. The following data has been prepared for cash receipts and payments. January February March Cash receipts $1,061,200 $1,182,400 $1,091,700 Cash...