QUESTION 36 Yesterday, you calculated the value of an annuity that you might buy
ID: 2713519 • Letter: Q
Question
QUESTION 36
Yesterday, you calculated the value of an annuity that you might buy using the current investment rate of 4.72%. Today, however, your investment interest rate has increased to 5.23%. What has happened to the value of the annuity?
a. Nothing, as changing interest rates do not affect the value of annuities.b.
b. The annuity value increased.
c. The annuity value decreased.
d. All of the above.
a. Nothing, as changing interest rates do not affect the value of annuities.b.
b. The annuity value increased.
c. The annuity value decreased.
d. All of the above.
Explanation / Answer
correct option is "C" -The annuity value decreased.
AS interest rate has increased ,the value of annuity will all as when we divide value with higher rate ,value will fall