Your father is about to retire, and wants to buy an annuity that will provide him with $50,000 of income per year for 25 years, beginning a year from today. The going rate on such annuities is 6.50%. How much would it cost him to buy such an annuity today?
Your father is about to retire, and wants to buy an annuity that will provide him with $50,000 of income per year for 25 years, beginning a year from today. The going rate on such annuities is 6.50%. How much would it cost him 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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Transcribed Image Text:Your father is about to retire, and wants to buy an annuity that will provide him with $50,000 of income per year for 25
years, beginning a year from today. The going rate on such annuities is 6.50%. How much would it cost him to buy such an
annuity today?
Your answer should be between 458,000.00 and 760,000.00, rounded to 2 decimal places, with no special
characters.
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