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I Love Finance, Inc. sells 4-year annuities. A buyer of this annuity receives eight semiannual cash flows in the amount of $6,600 each at
I Love Finance, Inc. sells 4-year annuities. A buyer of this annuity receives eight semiannual cash flows in the amount of $6,600 each at the end of each six months. I Love Finance, Inc. will begin these annuity payments in 7 years, and so the first semiannual cash flow will be received by the buyer in 7.5 years. a. The annuity's rate of return is 10 percent per year, compounded monthly. An investor buying it in five years will have to pay $_. (Do not round intermediate calculations. Round your final answer to 2 decimal places, e.g., 32.16.) b. An investor buying it in three years will have to pay $. (Assume the same rate of return structure as in part (a).) (Do not round intermediate calculations. Round your final answer to 2 decimal places, e.g., 32.16.) c. An investor buying it today will have to pay $ (Again assume the same rate of return structure as in part (a).) (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. Value of the annuity b. Value of the annuity C. Value of the annuity
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