You have your choice of two investment accounts investment


Question: You have your choice of two investment accounts. Investment A is a 12-year annuity that features end-of-month $1,300 payments and has an interest rate of 7.1 percent compounded monthly. Investment B is a 6.6 percent continuously compounded lump sum investment, also good for 12 years.

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?

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Finance Basics: You have your choice of two investment accounts investment
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