Calculate the Difference in the Current Economic Values of the Following

question 191

Multiple Choice

Calculate the difference in the current economic values of the following two annuities: Annuity "X": Payments of $10,000 made at the end of each year for the next 35 years.
Annuity "Y": Payments of $10,000 made at the end of each year for the next 55 years.
Use an interest rate of 13% compounded annually for both annuities.

• A) Annuity "Y" is worth $70,248 more than Annuity "X."
• B) Annuity "Y" is worth $26,225 more than Annuity "X."
• C) Annuity "Y" is worth $8,672 more than Annuity "X."
• D) Annuity "Y" is worth $975 more than Annuity "X."
• E) Annuity "Y" is worth $203 more than Annuity "X."

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Definitions:

Newborns

Infants in their first few weeks of life, typically considered to be from birth to one month of age.

Sperm Cells

Male reproductive cells designed to fertilize female eggs, characterized by their motility and role in transferring genetic information to the next generation.

Egg Cells

The female reproductive cells or ova, which when fertilized by sperm, lead to the development of an embryo.

Genes

DNA segments that serve as the key functional units in hereditary transmission, determining aspects of an individual's physical and possibly behavioral traits.