Ted Purchased an Annuity Today That Will Pay $1,000 a Month

question 62

Multiple Choice

Ted purchased an annuity today that will pay $1,000 a month for five years.He received his first monthly payment today.Allison purchased an annuity today that will pay $1,000 a month for five years.She will receive her first payment one month from today.Which one of the following statements is correct concerning these two annuities?

• A)Both annuities are of equal value today.
• B)Allison's annuity is an annuity due.
• C)Ted's annuity has a higher present value than Allison's.
• D)Allison's annuity has a higher present value than Ted's.
• E)Ted's annuity is an ordinary annuity.

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Definitions:

Constant Connectivity

The state of being continuously connected to the internet or network, allowing for uninterrupted access to information and communication.

Ethernet Cables

Cabling system used to connect devices on a local area network (LAN), facilitating communication between them.

Propagation Delay

The time it takes for a signal to travel from one point to another in a network, affecting the overall communication speed.

Radio

A technology that uses radio waves to transmit information, such as sound, by modulating properties of electromagnetic energy waves transmitted through space.