Assuming an annual effective interest rate of 5%. Which of the following annuities with 12 payments gives the largest present value? Annuity 1 has payments of PhP 2,000 at the beginning of every 2 years. Annuity 2 has payments of PhP 1,300 at the end of every quarter of the year. Annuity 3 has payments of PhP 2,760 at the end of the first year, PhP 2,530 at the end of the second year, PhP 2,300 at the end of the third year, and so on. Annuity 4 has payment of PhP 1,000 at the end of the first year and subsequent payments that increase at 10% per year.

Assuming an annual effective interest rate of 5%. Which of the following annuities with 12 payments gives the largest present value? Annuity 1 has payments of PhP 2,000 at the beginning of every 2 years. Annuity 2 has payments of PhP 1,300 at the end of every quarter of the year. Annuity 3 has payments of PhP 2,760 at the end of the first year, PhP 2,530 at the end of the second year, PhP 2,300 at the end of the third year, and so on. Annuity 4 has payment of PhP 1,000 at the end of the first year and subsequent payments that increase at 10% per year.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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