Your insurance company offered you an annuity that pays you $100 at the end of each year. The life of the annuity is 10 years. Assume that market interest rate you can earn on similar risky investments is 8%; What should be the present value of this annuity? If you are given the first payment immediately starting today, what should be the worth of this annuity?
Your insurance company offered you an annuity that pays you $100 at the end of each year. The life of the annuity is 10 years. Assume that market interest rate you can earn on similar risky investments is 8%; What should be the present value of this annuity? If you are given the first payment immediately starting today, what should be the worth of this annuity?
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 16P
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Your insurance company offered you an
- What should be the present value of this annuity?
- If you are given the first payment immediately starting today, what should be the worth of this annuity?
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