Question: You have your choice of two investment accounts. Investment A is a 12-year annuity that features end-of-month $1,300 payments and has an interest rate of 7.1 percent compounded monthly. Investment B is a 6.6 percent continuously compounded lump sum investment, also good for 12 years.
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?