Annuity a Has a Greater Present Value Than Annuity B

question 26

Multiple Choice

Annuity A has a greater present value than annuity B when cash flows are discounted using the same positive interest rate for each annuity.Which annuity will have the larger future value if compounded at the same interest rate?

• A)Annuity A will have a larger future value.
• B)Annuity B will have a larger future value.
• C)The future values will be the same.
• D)There is not enough information to determine which annuity will have a greater future value.