Question: The figure shows a graph that compares the future values, at 8% compounded annually, of an annuity of $1000 per year and one of $1120

The figure shows a graph that compares the future values, at 8% compounded annually, of an annuity of $1000 per year and one of $1120 per year.

(a) Decide which graph corresponds to which annuity.

(b) Verify your conclusion to (a) by finding the value of each annuity and the difference between them at t = 25 years.

2$ 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 time 10 20 30 Years %24 Dollars

2$ 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 time 10 20 30 Years %24 Dollars

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