An investor needs to deposit an amount on 1 January 2020 to purchase an annuity to receive a series of payment on a regular basis. He has two options as follows

Annuity A

- Gets RM 2500 semiannually for 4 years, that are 8 payments.

- 1 st payment of RM 2500 is due on 1 April 2020.

- The interest rate is at 8% compounded semiannually.

Annuity B

- Gets RM 1300 quarterly for 4 years, that are 16 payments.

- 1 st payment of RM1300 is due on 1 January 2020.

- The interest rate is at 10% compounded quarterly.

a) Draw a timeline for each annuity.

b)What are the present values for each annuity A and Annuity B on 1 January 2020?

c) If the investor would like to purchase the affordable annuity on 1 January 2020, which annuity should he get?