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Compute: You are a business analyst at Fiterman Insurance, and your boss tells you They are offering us a constant growth annuity that has a

Compute:

You are a business analyst at Fiterman Insurance, and your boss tells you They are offering us a constant growth annuity that has a coupon of $250,000 at the end of the first period. The instrument has a duration of 20 years, and coupons are received on a monthly basis. If the market rate is 15.75%, and the growth rate is 1.25%, what is a fair value of this annuity assuming no transaction costs?

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