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(8 marks) Annuity A makes payments of KA = $800.00 at the end of each six months for 30 payment periods, with an interest rate
(8 marks) Annuity A makes payments of KA = $800.00 at the end of each six months for 30 payment periods, with an interest rate of i = 2.675% per six months. Annuity B uses a nominal rate j(2) and makes payments Kp = $800.00 * 5(2, i) at the end of each year for 15 years. a) What is the present value of Annuity A? b) What is KB? c) What is j(2) so the value of these two annuities is the same? (8 marks) Annuity A makes payments of KA = $800.00 at the end of each six months for 30 payment periods, with an interest rate of i = 2.675% per six months. Annuity B uses a nominal rate j(2) and makes payments Kp = $800.00 * 5(2, i) at the end of each year for 15 years. a) What is the present value of Annuity A? b) What is KB? c) What is j(2) so the value of these two annuities is the same
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