You have access to a daily compounding interest rate of 0.0321% or a monthly compounding interest rate
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Question:
You have access to a daily compounding interest rate of 0.0321% or a monthly compounding interest rate of 0.79%. Which of the following has a greater value 5 years ago?
- A quarterly perpetuity that starts three years from now and pays $361 combined with a $76,000 lump sum payment that you owe in 6 years
- Or an annuity that started last year, pays $228 semiannually for 40 years and a $40,000 lump sum payment that was paid by you 8 years ago?
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