You have your choice of 3 investments. Investment A is a 15-year annuity that features end of month $1500 payments and has an interest rate of 5.5% compounded monthly. Investment B is a 5 percent continuously compounded lump sum investment also for 15 years.
a) How much would you need to invest in B today for it to be worth as much as investment A in 15 years from now?
b) If you invested the same amount as in B in a consol [C] and it paid 5% what would it pay annually?