(Annuity interest rate) Your folks just called and would like some advice from you. An insurance agent just called them and offered them the opportunity to purchase an annuity for $23,436.06 that will pay them $2,500 per year for 20 years. They don't have the slightest idea what return they would be making on their investment of $23,436.06. What rate ofreturn would they be earning? The annual rate of return your folks would be earning on their investment is %. (Round to two decimal places.)
(Annuity interest rate) Your folks just called and would like some advice from you. An insurance agent just called them and offered them the opportunity to purchase an annuity for $23,436.06 that will pay them $2,500 per year for 20 years. They don't have the slightest idea what return they would be making on their investment of $23,436.06. What rate ofreturn would they be earning? The annual rate of return your folks would be earning on their investment is %. (Round to two decimal places.)
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 22P
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An annuity refers to a series of equal and regular payments or receipts at fixed intervals. The value of an annuity is the discounted value of all future cash flows receivable from it.
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