You Are Considering Two Annuities,both of Which Pay a Total

question 129

Essay

You are considering two annuities,both of which pay a total of $20,000 over the life of the annuity.Annuity A pays $2,000 at the end of each year for the next 10 years.Annuity B pays $1,000 at the end of each year for the next 20 years.Which annuity has the greater value today?
Is there any circumstance where the two annuities would have equal values as of today?
Explain.

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Definitions:

Common Knowledge

Information that is generally known by a significant number of people and isn’t attributed to one source.

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Expressing the meaning of the words of the speaker or writer using different words, especially to achieve greater clarity.

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The act of giving or receiving something of value in exchange for some kind of influence or action in return, that is often unethical or illegal.

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The practice of fabricating data or facts, typically to deceive or mislead.