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Annuity A and B are exactly the same except that annuity A has an interest rate of 4% and annuity B has an interest rate of 5%, which one has the higher future value? Select one: a. B b. A=B c. A

Annuity A and B are exactly the same except that annuity A has an interest rate of 4% and annuity B has an interest rate of 5%, which one has the higher future value? Select one: a. B b. A=B c. A

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Annuity A and B are exactly the same except that annuity A has an interest rate of 4% and annuity B has an interest rate of 5%, which one has the higher future value?

Select one:
a.

B

b.

A=B

c.

A

 
Expert Solution
Step 1

Annuity means a series of equal payments Or receipts that are made every year. For example, $100 will be received every year for 10 years. It can be ordinary annuity, annuity due or deferred annuity. 

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