How can obtain the rate of interest per annum

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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.

Problem 1: 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: EM132763916

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