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Calculate the Difference in the Current Economic Values of the Following

Question 191

Multiple Choice

Calculate the difference in the current economic values of the following two annuities: Annuity "X": Payments of $10,000 made at the end of each year for the next 35 years.
Annuity "Y": Payments of $10,000 made at the end of each year for the next 55 years.
Use an interest rate of 13% compounded annually for both annuities.


A) Annuity "Y" is worth $70,248 more than Annuity "X."
B) Annuity "Y" is worth $26,225 more than Annuity "X."
C) Annuity "Y" is worth $8,672 more than Annuity "X."
D) Annuity "Y" is worth $975 more than Annuity "X."
E) Annuity "Y" is worth $203 more than Annuity "X."

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