Q13 hw 2

Live Forever Life Insurance Co. is selling a perpetuity contract that pays $1,150 monthly. The contract currently sells for $71,000.

Required:
(a)	What is the monthly return on this investment vehicle?
	(Click to select) 1.94% 1.62% 61.74% 1.86% 1.38%

(b)	What is the APR? (Do not round your intermediate calculations.)
	(Click to select) 21.38% 20.41% 17.49% 19.44% 17.89%

(c)	What is the effective annual rate? (Do not round your intermediate calculations.)
	(Click to select) 22.33% 19.14% 23.39% 21.27% 20.20%

rev: 09_17_2012