You Are Comparing Two Annuities with Equal Present Values

question 37

Multiple Choice

You are comparing two annuities with equal present values.The applicable discount rate is 6.65 percent,compounded annually.One annuity pays $4,500 on the first day of each year for 25 years.How much does the second annuity pay each year for 25 years if it pays at the end of each year?

• A)$4,708.03
• B)$4,623.87
• C)$4,608.51
• D)$4,799.25
• E)$4,747.50

Distinguish between different standards (e.g., majority vote, economic efficiency) used to evaluate economic activities.

Understand the basic principles of supply and demand and how they relate to market equilibrium.

Differentiate between elastic and inelastic demand and supply and their impacts on tax burden distribution.

Recognize the differing economic philosophies of Keynes and Hayek regarding government intervention and central planning.

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Definitions:

Negative Thought Patterns

Repetitive and persistent thoughts that are pessimistic or detrimental to wellbeing and self-esteem.

Psychoanalytic Therapy

A form of psychotherapy based on Freudian theories, focusing on unconscious processes and the patient's early life experiences.

Self-Neglectful

A behavior where an individual fails to attend to their basic needs, such as personal hygiene, proper nutrition, or medical care.

Realistic Positive Characteristics

Traits or features that are positively grounded in reality, contributing to an individual's ability to cope effectively with life's challenges.