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Sam is negotiating to purchase an annuity of $50 000 p.a. for 10 years. Funds currently earn 6% p.a. To sweeten the deal, the supplier
Sam is negotiating to purchase an annuity of $50 000 p.a. for 10 years. Funds currently earn 6% p.a. To sweeten the deal, the supplier offers (a) to make it an annuity due (with 10 payments in total) or (b) to add an extra payment of $10 000 to be paid immediately. Which is the better deal for Sam, if the price remains the same?
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