Question

In: Finance

A future value of an ordinary annuity stream of $185 periodic payment per year is $982.19...

A future value of an ordinary annuity stream of $185 periodic payment per year is $982.19 when valued at a 3% rate. Approx. how much would the future value change if this is annuity due & the new interest rate is now at 4%?

A. increase of $40.45

B. decrease of $29.47

C. increase of $39.50

D. decrease of $40.45

E. increase of $59.99

Solutions

Expert Solution

Note - Ordinary due means invested at end of the period where as annuity due means invested at the beginning of the period

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