You are offered three annuities for purchase. Annuities make payments over a specifiedamount of time. Using the NPV (6.1% discount rate) and IRR methodologies,calculate which annuity is the best choice:

# Cost($) Payments ($/yr) Life (yrs.)

1 5,055 1,005 4

2 6,750 1,890 (growing @0.3%/yr.) 5

3 50,000 830 (growing @4.5%/yr.) Forever

Excel

Annuity

1 2 3

Discount rate __________ _______________ _________

growth rate _____________ ______________ ___________

NPV _______________ _______________ __________

IRR ________________ ________________ ___________

Cash Flow:

Start _______________ _________________ __________

Year 1 ______________ __________________ ___________

Year 2 _________________ __________________ _____________

Year 3 _________________ __________________ _____________

year 4 __________________ __________________ _____________

year 5 __________________ _____________

year 6 and on _________________ _______________

need assistance with formula for Annuity 2 year 1-5

need assistnce with formula for Annuity 3 year 1-6