our uncle is about to retire, and he wants to buy an annuity that will provide him with $7,000 of income a year for 25 years, with the first payment coming immediately.  The going rate on such annuities is 5.25%.  How much would it cost him to buy the annuity today?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Your uncle is about to retire, and he wants to buy an annuity that will provide him with $7,000 of income a year for 25 years, with the first payment coming immediately.  The going rate on such annuities is 5.25%.  How much would it cost him to buy the annuity today?


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