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Problem:

You have your choice of two investment accounts. Investment A is a 12-year annuity that features end-of-month $1,750 payments and has an interest rate of 8.0 percent compounded monthly. Investment B is an 7.5 percent continuously compounded lump-sum investment, also good for 12 years.

Required:

Question: How much money would you need to invest in B today for it to be worth as much as investment A 12 years from now?

Note: Provide support for your rationale.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91163077

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