Time Value Of Money
Primary Task Response: Within the Discussion Board area, write 600–800 words that respond to the following questions with your thoughts, ideas, and comments. This will be the foundation for future discussions by your classmates. Be substantive and clear, and use examples to reinforce your ideas.
Describe the differences between perpetuities and annuities. Give examples of both types of products. Then, browse the following Web sites:
- What information on the first Web site could be the most applicable to a consumer or investor?
- What information on the second Web site could be the most applicable to a consumer or investor?
- Find 1 example of a perpetuity. How is the perpetuity structured? How can you tell that this is an annuity within the product? Explain your answer.
- Find 1 example of an annuity. How is the annuity structured? How can you tell that this is a perpetuity within the product? Explain your answer.
- Why would an investor prefer one product over the other? Explain your answer.
- How does the time value of money impact the eventual returns of both products?
- If the investor had a short life expectancy, which investment would he or she prefer?
- If the investor had a long life expectancy, which investment would he or she prefer?