You just inherited some money, and a broker offers to sell you an annuity that pays $5,000 at the end of each year for 20 years. You could earn 5% on your money in other investments with equal risk. What is the most you should pay for the annuity? $50,753 $59,195 $53,424 $62,311 $56,236
You just inherited some money, and a broker offers to sell you an annuity that pays $5,000 at the end of each year for 20 years. You could earn 5% on your money in other investments with equal risk. What is the most you should pay for the annuity? $50,753 $59,195 $53,424 $62,311 $56,236
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 6P
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- You just inherited some money, and a broker offers to sell you an annuity that pays $5,000 at the end of each year for 20 years. You could earn 5% on your money in other investments with equal risk. What is the most you should pay for the annuity?
- $50,753 $59,195
- $53,424 $62,311
- $56,236
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