Find the future value of both annuities at end of year nine

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Reference no: EM131610106

Marian Kirk wishes to select the better of two 9-year annuities, C and D. Annuity C is an ordinary annuity of $2,900 per year for 9 years. Annuity D is an annuity due of $2,560 per year for 9 years.

a. Find the future value of both annuities at the end of year 9, assuming that Marian can earn (1) 13% annual interest and (2) 26% annual interest.

b. Use your findings in part a to indicate which annuity has the greater future value at the end of year 9 for both the (1) 13% and (2) 26% interest rates..

c. Find the present value of both annuities, assuming that Marian can earn (1) 13% annual interest and (2) 26% annual interest.

d. Use your findings in part c to indicate which annuity has the greater present value for both the (1) 13% and (2) 26% interest rates.

e. Briefly compare, contrast, and explain any differences between your findings using the 13% and 26% interest rates in parts b and d.

Reference no: EM131610106

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