Problem 9-34 (Algo) Yield on Investment [LO9-4] C. D. Rom has just given an insurance company $46,500. In return, he will receive an annuity of $6,600 for 20 years. At what rate of return must the insurance company invest this $46,500 in order to make the annual payments? Use Appendix D for an approximate answer, but calculate your final answer using the financial calculator method. Note: Do not round Intermediate calculations. Round your final answer to 2 decimal places. Rate of return 6.35 %
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- A new investment opportunity for you is an annuity that pays $1,100 at the beginning of each year for 3 years. You could earn 5.5% on your money in other investments with equal risk. What is the most you should pay for the annuity? Select the correct answer. a. $3,141.25 b. $3,130.95 c. $3,120.65 d. $3,110.35 e. $3,100.05answer The Maybe Pay Life Insurance Company is trying to sell you an investment policy that will pay you and your heirs $36,000 per year forever. If the required return on this investment is 5.8 percent, how much will you pay for the policy? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) present value is?What is the most you would be willing to pay for an annuity that provides you with $13,700 at the end of each year for 3 years? Assume that similarly risky opportunities are offering you a return of 5.5% upon investment. $25,294.58 $38,994.58 $43360.50 $36,961.69 $48,020.56
- suppose you are planning to buy a home in 8 years from now that costs you 48854 OMR, How much should you save each year in your bank account that pays 6.012 percent to reach your goal? Select one: a. 3786.63 b. None of the options c. 483737.65 d. 4481.32 e. 4933.90Your investment advisor wants you to purchase an annuity that will pay you $25,000 per year for 10 years. If you require a 7% return, what is the most you should pay for this investment? Group of answer choices $201,000 $175,590 $225,682 $ 49,179 $250,000Congratulations you just won the Colorado Lotto!!! The cash flows below are related to the yearly annuitized jackpot. Assuming you take the Annuitized Jackpot (cash flows below), what would JG Wentworth pay if you called 877-CASH-NOW and offered to sell your annuity? Assume JG Wentworth wants a 10% annual rate of return on their investment. 200 300 400 1-10 11-15 16-20 You decide to reject the sale offer from JG Wentworth. How much would you have if you invested the jackpot winnings in the Russell 2000 index and generated a 12% annualized rate of return each and every year for 30 years? After calculating the Future Value of the Russell 2000 index, how much could you pull out over the next ten years (31-40) if you moved the money into a safer bond fund offering 4% per year?
- Problem 1: You can choose between two different investments: (A) an annuity that pays $10,000 each year for the next 6 years; (B) a perpetuity that pays $10,000 forever, starting 11 years from now. 1. Which investment do you choose, A or B, if the interest rate is 5%? What if it is 10%? Explain in words the reason behind your choices.(Solving for i) An insurance agent just offered you a new insurance product that will provide you with $963.60 12 years from now if you invest $200 today. What annual rate of interest would you earn if you invested in this product? The annual rate of interest you would earn if you invested in this product is %. (Round to the nearest whole percent.)You have received a settlement from an insurance company which will pay you $100,000 per year for 12 years at the end of each year and J.G. Wentworth wants to buy your annuity. What is JG Wentworth’s annual rate of return (interest rate) if they are willing to pay you $500,000 today? 7.56% 18.21% 16.94% Interest rate cannot be calculated.
- Your insurance agent is trying to sell you an annuity that costs $80,000 today. By buying this annuity, your agent promises that you will receive payments of $445 per month for 30 years. What is the rate of return expressed as an APR on this investment? Multiple Choice O 4.91% 5.32% 4.43% 5.23%Problem 6. Including loan The following investment alternatives are being evaluated. Assuming that there is only $30,000 available and the surplus will be acquired through a loan at 5.5% annual effective interest payable in annual payments over 4 years. Determine which alternative should be selected. Perform the analysis using the Present Value, Equivalent Annuity and IRR Methods. Use a MARR = 7% Year A B 0 -25000 -46000 1 7460 16640 2 7460 16640 3 7460 16640 4 6500 12600 5 6000 10600Curly's Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $25,000 per year forever. Assume the required return on this investment is 6 percent. Required: How much will you pay for the policy? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) Policy value today