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Financial Math: I only need help with 14 (b). -the answers...

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Finance

Financial Math:
I only need help with 14 (b).
-the answers are provided, I just do not know how they got the answers for (b)
Will rate for being descriptive and correct!
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(14) Suppose you have the choice of investing $1000 in just one of two ways. Each investment will pay you an amount listed in the table below at the end of each year for the next five years. Year1 234 |5 Investment A 225215 250225205 Investment B 220 225 250 250 210 (a) Using the present value of the investment to make the decision, which investment would you choose? Assume the annual interest rate is 4.33%. (b) Using the rate of return per year of the investment to make the decision, which investment would you choose? (14) (a) The present value of initial investment and payout amounts for investment A is (assuming an annual interest rate of r 0.0433), -$10.91. The present value of the initial investment and payout amounts for in- vestment Bis $18.63. Thus investment B is preferable if present value is the decision criterion. (b) The rate of return of investment A is rA 0.0394 while the rate of return of investment Bis rB 0.0499. Thus investment B would be the preferable investment if rate of return were the deciding criterion

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