Problem:
You have your choice of two investment accounts. Investment A is a 12-year annuity that features end-of-month $1,750 payments and has an interest rate of 8.0 percent compounded monthly. Investment B is an 7.5 percent continuously compounded lump-sum investment, also good for 12 years.
Required:
Question: 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?
Note: Provide support for your rationale.