Annuity
	1	2	3
Discount rate	6.1%	6.1%	6.1%		Best choice?
Growth rate
NPV
IRR
Cash flows:
Start
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6 and on

1. You are offered three annuities for purchase. Annuities make payments over a specified amount of time. Using the NPV (6.1% discount rate) and IRR methodologies, calculate which annuity is the best choice: # Cost($) Payments ($/yr) Life (yrs.) 1 5,055 1,005 4 2 6,750 1,890 (growing @0.3%/yr.) 5 3 50,000 830 (growing @4.5%/yr.) Forever 3