University Valuation II Annuities (calculation) You own two annuity investments and have a discount rate of 10% p.a.: Annuity 1 - This annuity has 8 monthly payments in advance which grow at 2% every month. The first payment is $300. The value of this annuity today is: Annuity 2 - This annuity pays $200 every quarter for 5 years. The value of this annuity today is: You are offered $2,000 to sell any one of the investments. Which investment will you sell (if any) and calculate the gain? Answer: (Each correctly filled blank is 1/3 of the 10 marks)