QUESTION 16

1. You are considering the following annuity for a client. Payments of $15,000 per year for 20 years beginning at the end of next year. (payments occur at the end of each year, first payment one year after you buy the annuity contract).

   The price the insurance company is charging for this annuity $100,000. You client must make the payment today (time 0).

   You are seeking an internal rate of return of at least 15%. This annuity meets your return criteria. Use the Excel IRR function to solve this problem.

   True

   False