Two annuities have both equal present and future values

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Reference no: EM131020731

You are comparing two annuities that offer quarterly payments of $2,500 for five years and pay .75 percent interest per month. You will purchase one of these today with a single lump sum payment. Annuity A will pay you monthly, starting today, while annuity B will pay monthly, starting one month from today. Which one of the following statements is correct concerning these two annuities?

These two annuities have both equal present and future values.

These annuities have equal present values but unequal future values.

Annuity B has a smaller present value than annuity A.

Annuity A has a smaller future value than annuity B.

Annuity B is an annuity due.

Reference no: EM131020731

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