Business, 04.04.2020 09:45 chandranewlon
An insurance company wants to sell you an annuity which will pay you $750 per quarter for 30 years. You want to earn a minimum rate of return of 6.0 percent. What is the most you are willing to pay as a lump sum today to buy this annuity
Answers: 3
![\text{Present Lump\: Sum}, \:A_0=\dfrac{P[1-(1+i)^{-kt}]}{\frac{r}{k} }](/tpl/images/0582/0597/86bed.png)
![=\dfrac{750[1-(1+0.015)^{-4X30}]}{0.015}=\$41,623.84](/tpl/images/0582/0597/adc11.png)
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An insurance company wants to sell you an annuity which will pay you $750 per quarter for 30 years....
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