You are comparing two annuities with equal present values. The applicable discount rate is 6.65 percent, compounded annually. One annuity pays $4,500 on the first day of each year for 25 years. How much does the second annuity pay each year for 25 years if it pays at the end of each year?

You are comparing two annuities with equal present values. The applicable discount rate is 6.65 percent, compounded annually. One annuity pays $4,500 on the first day of each year for 25 years. How much does the second annuity pay each year for 25 years if it pays at the end of each year?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 1P

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Question

3 You are comparing two annuities with equal present values. The applicable discount rate is 6.65
percent, compounded annually. One annuity pays $4,500 on the first day of each year for 25 years.
How much does the second annuity pay each year for 25
years
if it
pays at the end of each year?

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