C. D. Rom has just given an insurance company $35,000. In return, he will receive an annuity

Question:

C. D. Rom has just given an insurance company $35,000. In return, he will receive an annuity of $3,700 for 20 years.

At what rate of return must the insurance company invest this $35,000 in order to make the annual payments? Interpolate.

Annuity
An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,...