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Explain how you can obtain the rate of interest per annum

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Reference no: EM132980605

Question - You are offered the choice of two annuities.

A: Receive $100 every year for the next ten years. The first payment starts one year from today.

B: Receive $204 every two years for the next ten years. The first payment starts two years from today.

Without calculating the present values of the annuities, explain how you can obtain the rate of interest per annum that would make you indifferent between the two annuities.

Reference no: EM132980605

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