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You are considering the purchase of two different insurance annuities. Annuity A will pay you $10,000 each year for eight years. Annuity B will pay

You are considering the purchase of two different insurance annuities. Annuity A

will pay you $10,000 each year for eight years. Annuity B will pay you $12,000 per

year for eight years. The purchase price for Annuity A is $40,000 and for Annuity B the

cost is $50,000. Assuming your money is worth 10%, which annuity would you prefer? Why?

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