Your uncle is about to retire, and he wants to buy an annuity that will provide him with $55,928 of income a year for 10 years, with the first (income) payment taking place immediately. The relevant rate on such annuities is 8%. How much would it cost him to buy the annuity today?
Your uncle is about to retire, and he wants to buy an annuity that will provide him with $55,928 of income a year for 10 years, with the first (income) payment taking place immediately. The relevant rate on such annuities is 8%. 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
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Your uncle is about to retire, and he wants to buy an annuity that will provide him with $55.928 of
income a year for 10 years, with the first (income) payment taking place immediately. The relevant
rate on such annuities is 8%. How much would it cost him to buy the annuity today?
**Round your answer to the nearest three decimals if needed. Do not type the $ symbol.
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