Calculate the Difference in the Current Economic Values of the Following

question 70

Multiple Choice

Calculate the difference in the current economic values of the following two annuities: Annuity "A": Payments of $50 made at the end of each month for the next 30 years, using 9.6% compounded monthly. Annuity "B": Payments of $600 made at the end of every year for the next 50 years using 9.6% compounded annually.

• A) Annuity "A" is worth $291 more than Annuity "B."
• B) Annuity "A" is worth $103 more than Annuity "B."
• C) The current economic values are within $50 of each other.
• D) Annuity "B" is worth $103 more than Annuity "A."
• E) Annuity "B" is worth $291 more than Annuity "A."

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