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Q # 7 (3 Marks) An insurance agent is trying to sell you a retirement annuity, which for a lump-sum amount paid today, the annuity
Q # 7 (3 Marks)
An insurance agent is trying to sell you a retirement annuity, which for a lump-sum amount paid today, the annuity will provide you with $12,000 per year at the end of each of the next 25 years. You currently earn 6% on investments comparable to the retirement annuity. (Timelines are not required.)
Required: Ignoring taxes, what is the most you would pay for this annuity?
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