Upon attempting to solve a problem regarding annuities, I am a little puzzled regarding the following strategy of investment.
$10,000$ can be invested so that one can purchase an annuity-immediate with "$24$ level annual payments at an effective annual rate of $10\%$.The payments are deposited into a fund earning an effective annual rate of $5\%$."
The bolded part is what I am not sure what is going on.
Is $10,000 \over 25$ deposited each year for $25$ years? Under which interest rate, $5$ or $10$?
Or, is it the case that $10,000 \over 24$ is deposited into $24$ intervals during a year which earns $10\%$ effective annual interest, and then that payment is the present value of the annuity that earns $5\%$ annual interest?
Thanks so much for your help.