Question

Two employees of a real estate company prepare bids for the purchase of land.

Offer A is for an immediate cash purchase of $200.000. Offer B is for $66,000 cash down payment and the purchase of
an annuity with an annual rate of 8% compounded quarterly yielding payments of $8040 to be paid quarterly on behalf of
the company for 5 years.

(a) Determine which offer requires the lesser amount of money
(b) find the difference between the cash values of the two offers.

Answer 1

offer b is lower and the diffrenc eis 1,235

Explanation: