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You want to buy an ordinary annuity that will pay you R4,000 a year for the next 20 years. You expect annual interest rates will be 8 percent over that time period. The maximum price you would be willing to pay for the annuity is closest to A. R32,000 B. R39, 272 C. R40,000 D. R80,000 O O O O

You want to buy an ordinary annuity that will pay you R4,000 a year for the next 20 years. You expect annual interest rates will be 8 percent over that time period. The maximum price you would be willing to pay for the annuity is closest to A. R32,000 B. R39, 272 C. R40,000 D. R80,000 O O O O

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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You want to buy an ordinary annuity that will pay you R4,000 a year for the next 20 years. You expect annual interest rates will be 8 percent over that time period. The maximum price you would be willing to pay for the annuity is closest to A. R32,000 B. R39, 272 C. R40,000 D. R80,000 O O оо
Transcribed Image Text:You want to buy an ordinary annuity that will pay you R4,000 a year for the next 20 years. You expect annual interest rates will be 8 percent over that time period. The maximum price you would be willing to pay for the annuity is closest to A. R32,000 B. R39, 272 C. R40,000 D. R80,000 O O оо
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