Your aunt is about to retire, and she wants to sell some of her stock and buy an annuity that will provide her with income of $78,000 per year for 30 years, beginning a year from today. The going rate on such annuities is 7.25%. How much would it cost her to buy such an annuity today?

Your aunt is about to retire, and she wants to sell some of her stock and buy an annuity that will provide her with income of $78,000 per year for 30 years, beginning a year from today. The going rate on such annuities is 7.25%. How much would it cost her to buy such an 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

Section: Chapter Questions

Problem 1PS

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9) Your aunt is about to retire, and she wants to sell some of her stock and buy an annuity that
will provide her with income of $78,000 per year for 30 years, beginning a year from today.
The going rate on such annuities is 7.25%. How much would it cost her to buy such an annuity
today?

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