How much money would you need to invest in B today for it to be worth as much as investment A in 13 years?
You have your choice of two investment accounts. Investment A is a 13-year annuity that features end-of-month $ 1,500 payments and has an interest rate of 7.5 percent compounded monthly. Investment B is a 7 percent continuously compounded lump sum investment, also good for 13 years.
Investment best answer:
Answer by cactusgene
You query is somewhat confusing, but here is the calculation of the net present value of the two investments and the online calculators to get the results:
Investment A (an ordinary annuity): $ 149,198.74
http://www.calculatorsoup.com/calculators/financial/present-value-annuity-calculator.php
Investment B: your end sum will be 2.484323 times you initial investment based on continuous compounding, but I don't see how that relates or compares to investment A:
http://www.moneychimp.com/articles/finworks/continuous_compounding.htm
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2013-05-16 Russell Investments Center
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2013-05-16 Russell Investments Center
Orignal From: How much money would you need to invest in B today for it to be worth as much as investment A in 13 years? and 2013-05-16 Russell Investments Center
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