The client has asked you for advice concerning the following annuity for a client. The client will receive payments from the insurance company that is selling the annuity of $40,000 per year for 15 years beginning at the end of year 10. (payments occur at the end of each year, first payment 10 years after you make the initial payment to buy the annuity contract). For ten years your client receives no annuity payments. The first payment to your client is at the end of year 11.

The price the insurance company is charging your client for this annuity $10,000 per year for 11 years. This means your client must make annual payments at the end of each year beginning at time 0 of $10,000. Your client must make a total of 11 payments of $10,000. The client requires an internal rate of return on the investment of at least 14%. Your client should buy this annuity.Use the Excel IRR function to solve this problem.These are the contractual cash flows of the annuity.

time	cash flow
0	($10,000)
1	($10,000)
2	($10,000)
3	($10,000)
4	($10,000)
5	($10,000)
6	($10,000)
7	($10,000)
8	($10,000)
9	($10,000)
10	($10,000)
11	$40,000
12	$40,000
13	$40,000
14	$40,000
15	$40,000
16	$40,000
17	$40,000
18	$40,000
19	$40,000
20	$40,000
21	$40,000
22	$40,000
23	$40,000
24	$40,000
25	$40,000