Calculate and Rank the Equivalent Values Eight Years from Now

question 139

Essay

Calculate and rank the equivalent values eight years from now of the following cash flow streams.
(i) A single payment of $5,000 today.
(ii) An ordinary annuity starting today with eight annual payments of $910.
Do the calculations and ranking for each of following two cases:
a) Money can earn 8% compounded annually for the next eight years.
b) Money can earn 10% compounded annually for the next eight years.

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