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The Perpetual Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $15,000 per year forever. If

The Perpetual Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $15,000 per year forever. If the required return on this investment is 8 percent, how much will you pay for the policy? Suppose the Perpetual Life Insurance Co. told you the policy costs $195,000. At what interest rate would this be a fair deal?

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