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You are considering two annuities, both of which make total annuity payments of $10,000 over their life. Which would be worth more today: annuity A,
You are considering two annuities, both of which make total annuity payments of $10,000 over their life. Which would be worth more today: annuity A, which pays $1,000 at the end of each year for the next 10 years, or annuity B, which pays $775 at the end of the first year, but the annuity payment grows by $50 each year, reaching $1,225 at the end of year 10? Are there any circumstances in which the two would be equal? Explain.
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