Calculate the Difference in the Current Economic Values of the Following

question 1

Multiple Choice

Calculate the difference in the current economic values of the following two annuities: #1: Payments of $300 made at the end of every month for the next five years. #2: Payments of $200 made at the end of every month for the next 10 years. Use an interest rate of 14.4% compounded monthly for both annuities.

• A) Annuity #1 is worth $398 more than Annuity #2.
• B) Annuity #1 is worth $95 more than Annuity #2.
• C) The current economic values are within $10 of each other.
• D) Annuity #2 is worth $95 more than Annuity #1.
• E) Annuity #2 is worth $398 more than Annuity #1.

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Definitions:

Dizygotic Twins

Also known as fraternal twins, are siblings born at the same time who have developed from two different eggs fertilized by two different sperm.

Secondary Sexual Characteristics

Physical traits that are not directly involved in reproduction but distinguish the two sexes, such as breast development in females and facial hair in males.

Hormones

Hormones are chemical messengers produced by the endocrine glands that regulate various functions in the body, from growth and metabolism to mood and reproduction.

Gonads

The ovaries in females and the testes in males; endocrine glands that produce sex hormones.