An insurance firm agrees to pay you $5,089 at the end of 25 years if you pay premiums of $123 per year at the end of each year for 25 years. Find the internal rate of return to the nearest whole percentage point. Assuming you normally earn a return of 7 percent on your investments, is this a good deal or a bad deal? 3.95%; bad deal 4.05%; good deal 4.05%; bad deal ○ 4.15%; good deal 4.15%; bad deal

An insurance firm agrees to pay you $5,089 at the end of 25 years if you pay premiums of $123 per year at the end of each year for 25 years. Find the internal rate of return to the nearest whole percentage point. Assuming you normally earn a return of 7 percent on your investments, is this a good deal or a bad deal? 3.95%; bad deal 4.05%; good deal 4.05%; bad deal ○ 4.15%; good deal 4.15%; bad deal

PFIN (with PFIN Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)

6th Edition

ISBN:9781337117005

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter7: Using Consumer Loans

Section: Chapter Questions

Problem 4FPE

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