Question
Consider an insurance policy that promises to pay the holder $788 per month for the next 20 years. The first payment will be one month
Consider an insurance policy that promises to pay the holder $788 per month for the next 20 years. The first payment will be one month after the purchase of the policy. (This type of policy is called a term annuity.) The appropriate discount rate is an APR of 8.98%, compounded monthly.
What is the value of this policy?
Round your answer to the nearest dollar.
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Foundations of Finance The Logic and Practice of Financial Management
Authors: Arthur J. Keown, John D. Martin, J. William Petty
8th edition
132994879, 978-0132994873
