Question
9. Implied interest rate and period Consider the case of the following annuities, and the need to compute either their expected rate of return or
9. Implied interest rate and period
Consider the case of the following annuities, and the need to compute either their expected rate of return or duration.
Raul inherited an annuity worth $4,629.10 from his uncle. The annuity will pay him seven equal payments of $800 at the end of each year. The annuity fund is offering a return of _________? .
Rauls friend, Sadler, has hired a financial planner for advice on retirement. Considering Sadlers current expenses and expected future lifestyle changes, the financial planner has stated that once Sadler crosses a threshold of $1,239,909 in savings, he will have enough money for retirement. Sadler has nothing saved for his retirement yet, so he plans to start depositing $70,000 in a retirement fund at a fixed rate of 5.00% at the end of each year. It will take ____________ ? for Sadler to reach his retirement goal.
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