Rita desires to purchase an ordinary annuity that will pay her $4,000 a year for the next 20 years. She is expecting that the annual interest rates will be 8% over that time period. The maximum price that Rita will be willing to pay for the annuity is closest to: a. 32,000 b. 39,273 c. 40,000 d. 80,000
Rita desires to purchase an ordinary annuity that will pay her $4,000 a year for the next 20 years. She is expecting that the annual interest rates will be 8% over that time period. The maximum price that Rita will be willing to pay for the annuity is closest to: a. 32,000 b. 39,273 c. 40,000 d. 80,000
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications
Section: Chapter Questions
Problem 15E
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Rita desires to purchase an ordinary annuity that will pay her $4,000 a year for the next 20 years. She is expecting that the annual interest rates will be 8% over that time period. The maximum price that Rita will be willing to pay for the annuity is closest to:
a. 32,000
b. 39,273
c. 40,000
d. 80,000
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