An insurance annuity offers to pay you $1,000 per quarter for 20 years. If you want to earn a rate of return of 6.5 percent, what is the most you are willing to pay as a lump sum today to buy this annuity?
a. $32,008.24
b. $34,208.16
c. $44,591.11
d. $43,008.80
e. $38,927.59
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Ответ:
c. $44,591.11
Explanation:
In this question, we use the Present value formula that is shown in the attachment. Kindly find it below:
Provided that
Future value = $0
Rate of interest = 6.5% ÷ 4 = 1.625%
NPER = 20 years × 4 = 80
PMT = $1,000
The formula is shown below:
= -PV(Rate;NPER;PMT;FV;type)
So, after solving this, the lump sum amount is $44,591.11
Ответ:
sleeping and watching netflix
Explanation: