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Time value-Annuities Personal Finance Problem Marian Kirk wishes select the better of two 5-year annuities. Annuity 1 is an ordinary annuity of S1,550 per year
Time value-Annuities Personal Finance Problem Marian Kirk wishes select the better of two 5-year annuities. Annuity 1 is an ordinary annuity of S1,550 per year for 5 years. Annuity 2 is an annuity due of 51.420 per year for 5 years a. Find the future value of both annuities at the end of year 5, assuming that Marian can earn (1) 7% annual interest and (2) 14% annual interest. b. Use your findings in part a to indicate which annuity has the greater future value at the end of year 5 for both the (1) 7% and (2) 14% interest rates.. c. Find the present value of both annuities, assuming that Marian can earn (1) 7% annual interest and (2) 14% annual interest. d. Use your findings in partc to indicate which annuity has the greater present value for both the (1) 7% and (2) 14% interest rates. e. Briefly compare, contrast, and explain any differences between your findings using the 7% and 14% interest rates in parts b and d. 4. a. The future value of Annuity 1 at 7% interest is $(Round to the nearest cent.)
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