ENGR.ECONOMIC ANALYSIS
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ISBN: 9780190931919
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Transcribed Image Text:in-11.3%
PW-P14,539.69
You are considering the purchase, for P15,000, of an annuity that pays
P2,500 per year for the next 10 years. You want to have a real rate of
return of 5%, and you estimate inflation will average 6% per year over the Since this is less
next 10 years. Should you buy the annuity?
than the P15,000
initial investmem
do not buy the
annuity.
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