MC Qu. 6-A7 The Good Life Insurance Co. wants to sell you an annuity... The Good
ID: 2641079 • Letter: M
Question
MC Qu. 6-A7 The Good Life Insurance Co. wants to sell you an annuity...
The Good Life Insurance Co. wants to sell you an annuity which will pay you $780 per quarter for 25 years. You want to earn a minimum rate of return of 6.3 percent. What is the most you are willing to pay as a lump sum today to buy this annuity?
The Good Life Insurance Co. wants to sell you an annuity which will pay you $780 per quarter for 25 years. You want to earn a minimum rate of return of 6.3 percent. What is the most you are willing to pay as a lump sum today to buy this annuity?
$42,733.47 $52,013.85 $50,552.74 $38,771.98 $39,145.40Explanation / Answer
Answer:
$39,145 - the most you are willing to pay as a lump sum today to buy this annuity.
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