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Interest rate implicit in an annuity You just won the state lottery. The state gives you the choice of $1,000,000 today or a 20-year annuity
Interest rate implicit in an annuity 
Interest rate implicit in an annuity You just won the state lottery. The state gives you the choice of $1,000,000 today or a 20-year annuity of $75,000, with the first payment coming one year from today. What rate of return is built into the annuity? Interest rate implicit in an annuity Assume that you own an annuity that will pay you $10,000 per year for 10 years, with the first payment being made today. Your girlfriend's father offers to give you $45,000 for the annuity. If you sell it, what rate of return would your girlfriend's father carn on his investment You just won the state lottery. The state gives you the choice of $1,000,000 today or a 20-year annuity
of $75,000, with the first payment coming one year from today. What rate of return is built into the
annuity?
Interest rate implicit in an annuity
Assume that you own an annuity that will pay you $10,000 per year for 10 years, with the first payment
being made today. Your girlfriend's father offers to give you $45,000 for the annuity. If you sell it,
what rate of return would your girlfriend's father earn on his investment?
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Risk Management And Financial Institutions
Authors: John C Hull
6th Edition
1119932483, 9781119932482
