Which of the following investments would have the highest future value (in year 5) if the...

Question

Question

Which of the following investments would have the highest future value (in year 5) if the discount rate is 12%?

A five year ordinary annuity of $100 per year

A five year annuity due of $100 per year

$700 to be received at year 5

$500 to be received today (year 0)

Answer 1

Answer #1

future of $100 per year = pmtx ((1+r)^n-1))/r $635.28 ($100*(((1.1245)-1)/0.12)] Future value of annuity due = (1+r)* pmt x (

Answer 2

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