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Shelby purchases a retirement annuity that will pay her $3,000 at the end of every six months for the first eight years and $200 a the end of every month for the next three vears Tbe appuity earns interest at a rate

Shelby purchases a retirement annuity that will pay her $3,000 at the end of every six months for the first eight years and $200 a the end of every month for the next three vears Tbe appuity earns interest at a rate

EBK CFIN
EBK CFIN
6th Edition
ISBN:9781337671743
Author:BESLEY
Publisher:BESLEY
Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 25PROB
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Shelby purchases a retirement annuity that will pay her $3,000 at the end of every six months for the first eight years and $200 at the end of every month for the next three years. The annuity earns interest at a rate of 2.8% compounded quarterly. a. What was the purchase price of the annuity? Round to the nearest cent b. How much interest did Shelby receive from the annuity? Round to the nearest cent
Transcribed Image Text:Shelby purchases a retirement annuity that will pay her $3,000 at the end of every six months for the first eight years and $200 at the end of every month for the next three years. The annuity earns interest at a rate of 2.8% compounded quarterly. a. What was the purchase price of the annuity? Round to the nearest cent b. How much interest did Shelby receive from the annuity? Round to the nearest cent
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