You Are Comparing Two Annuities with Equal Present Values

question 32

Multiple Choice

You are comparing two annuities with equal present values.The applicable discount rate is 8.75 percent.One annuity pays $5,000 on the first day of each year for 20 years.How much does the second annuity pay each year for 20 years if it pays at the end of each year?

• A)$5,211
• B)$5,267
• C)$5,309
• D)$5,390
• E)$5,438

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