Live Forever Life Insurance Company is selling a perpetuity contract that pays $ 1 , 3 0 0 monthly The contract currently sells for $ 6 1 , 0 0 0 a What is the monthly return on this investment vehicle b What is the APR c What is the effective annual rate

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 10, 2024

Live Forever Life Insurance Company is selling a perpetuity contract that pays $ 1 , 3 0 0 monthly. The contract currently sells for $

Live Forever Life Insurance Company is selling a perpetuity contract that pays $

1, 300

monthly. The contract currently sells for $

61, 000 .

.

What is the monthly return on this investment vehicle?

.

What is the APR?

.

What is the effective annual rate?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

Step: 3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Oxford Handbook Of IPOs

Authors: Douglas Cumming, Sofia Johan

1st Edition

0190614579, 978-0190614577

More Books

Students also viewed these Finance questions

Question

★★★★★

Why do firms issue stock dividends? Comment on the following statement: I have a stock that promises to pay a 20 percent stock dividend every year, and therefore it guarantees that I will break even...

Answered: 1 week ago

Question

★★★★★

For the beam and loading shown, (a) Draw the shear and bending-moment diagrams, (b) Determine the magnitude and location of the maximum bending moment. 2kN/m 4 kN 3.2 m 0.8 m

Answered: 1 week ago

Question

★★★★★

72. The logistic pdf f (x) ex/(1 ex)2 for q xqis sometimes used to describe the distribution of measurement errors. W X m ~ a. Graph the pdf. Does the appearance of the graph surprise you? b....

Answered: 1 week ago

Question

★★★★★

The following data are the actual results for Marvelous Marshmallow Company for August. Actual output.............................................................13,500 cases Actual variable...

Answered: 1 week ago

Question

★★★★★

uppose we have just found yet another representation for floating point numbers. Using this representation, a 1 2 - bit floating point number has 1 bit for the sign of the number, 4 bits for the...

Answered: 1 week ago

Question

★★★★★

Alex loans Nomar $200,000 at a rate of 12% nominal interest convertible quarterly. They agree that Nomar will repay the loan by making quarterly payments. These payments will each be $24,000 except...

Answered: 1 week ago

Question

★★★★★

Labor relations in HRM deals with: Question 10Answer a. complaints and arbitrations. b. conflict management c. settlement agreements d. All of the above

Answered: 1 week ago

Question

★★★★★

Indira is getting ready to shift from a building mindset to a learning mindset for her projects. What is the first thing she will do to prioritize learning? Select an answer: Debate that learning...

Answered: 1 week ago

Question

★★★★★

Deb Bishop Health and Beauty Products has developed a new shampoo and you need to develop its aggregate schedule. The cost accounting department has supplied you the cost relevant to the aggregate...

Answered: 1 week ago

Question

★★★★★

The script should run every 30 minutes using a cron job under user "bill" and work exactly as described in the man page accompanying this exercise. When a zombie is detected a log message is appended...

Answered: 1 week ago

Question

★★★★★

Which bias helps to explain why people like to go to all-inclusive resorts, where the entire cost of the vacation is paid upfront, and guests don't have to pay for individual meals, drinks,...

Answered: 1 week ago

Question

★★★★★

(Appendices) Many employers have both group short-term and long-term disability-income plans. Compare (1) short-term plans with (2) long-term plans with respect to each of the following: LO8 a....

Answered: 1 week ago

Question

★★★★★

(Appendices) The Unemployment Insurance Modernization Act was included in the fiscal stimulus package of early 2009. The act was designed to modernize and make corrections to serious defects found in...

Answered: 1 week ago

Question

★★★★★

(Appendices) Although eligibility requirements for unemployment compensation vary among the states, there are a number of common eligibility requirements. Assume that a worker meets the qualifying...

Answered: 1 week ago

Previous Question Next Question