Question
An insurance agent is trying to sell you an immediate- retirement annuity, which for a single amount paid today will provide you with $12,000 at
An insurance agent is trying to sell you an immediate- retirement annuity, which for a single amount paid today will provide you with $12,000 at the end of each year for the next 25 years. You currently earn 9% on low-risk investments comparable to the retirement annuity. Ignoring taxes, what is the most you would pay for this annuity?
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Contemporary Financial Management
Authors: James R Mcguigan, R Charles Moyer, William J Kretlow
10th Edition
978-0324289114, 0324289111
