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Assume that you just inherited an annuity that will pay you $10,000 per year for 10 years, with the first payment being made today. A
Assume that you just inherited an annuity that will pay you $10,000 per year for 10 years, with the first payment being made today. A friend of your mother offers to give you $60,000 for the annuity. If you sell it, what rate of return would your mothers friend earn on his investment? If you think a fair return would be 6%, how much should you ask for the annuity?(13.70%; $78,016.92)
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