Sam is negotiating to purchase an annuity of $50 000 p.a. for 10 years. Funds currently earn 6% p.a. To sweeten the deal, the supplier offers (a) to make it an annuity due (with 10 payments in total) or (b) to add an extra payment of $10 000 to be paid immediately. Which is the better deal for Sam, if the price remains the same? Please do fast ASAP fast

Sam is negotiating to purchase an annuity of $50 000 p.a. for 10 years. Funds currently earn 6% p.a. To sweeten the deal, the supplier offers (a) to make it an annuity due (with 10 payments in total) or (b) to add an extra payment of $10 000 to be paid immediately. Which is the better deal for Sam, if the price remains the same? Please do fast ASAP fast

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 6P

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