Annually compounded lump-sum investment with interest rate

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Reference no: EM131316240

You have your choice of two investment accounts. Investment A is a 7-year annuity that features end-of-month $2,500 payments and has an interest rate of 8 percent compounded monthly. Investment B is an annually compounded lump-sum investment with an interest rate of 10 percent, also good for 7 years.

How much money would you need to invest in B today for it to be worth as much as Investment A 7 years from now?

Reference no: EM131316240

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