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

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Definitions:

Hallucination

A perception in the absence of external stimulus that has qualities of real perception; hallucinations are vivid, substantial, and located in external objective space.

Delusions of Persecution

False beliefs that one is being harassed, cheated, or persecuted, often found in paranoid schizophrenia.

Organic Dysfunctions

Disorders caused by organic changes or damage in the brain, leading to psychological symptoms.

Physical Causes

Natural, biological, or material factors that directly influence the occurrence or development of a condition or event.