Question
Your friend offers to pay you an annuity of $2500 at the end of each year for 3 years in return for cash today. You
Your friend offers to pay you an annuity of $2500 at the end of each year for 3 years in return for cash today. You could earn 5.5% on your money in other investments with equal risk. What is the most you should pay for the annuity?
*Please provide a detailed answer
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Investment Analysis And Portfolio Management
Authors: Frank K. Reilly, Peggy L. Hedges, Philip Chang, Keith C. Brown, Hedges Reilly Brown
1st Canadian Edition
0176500693, 978-0176500696
