Professor's Annuity Corp. offers a lifetime annuity to retiring professors. For a payment of $80,000 at age 65, the firm will pay the retiring professor $600 a month until death. a. If the professor's remaining life expectancy is 20 years, what is the monthly rate on this annuity? (Round your answer to 4 decimal places.) The monthly rate on the annuity % What is the effective annual rate? (Round your answer to 3 decimal places.) The effective annual rate % What is the APR? (Round your answer to 4 decimal places.) APR % b. If the monthly interest rate is .5%, what monthly annuity payment can the firm offer to the retiring professor? (Round your answer to the nearest cent.) PMT $

Professor's Annuity Corp. offers a lifetime annuity to retiring professors. For a payment of $80,000 at age 65, the firm will pay the retiring professor $600 a month until death. a. If the professor's remaining life expectancy is 20 years, what is the monthly rate on this annuity? (Round your answer to 4 decimal places.) The monthly rate on the annuity % What is the effective annual rate? (Round your answer to 3 decimal places.) The effective annual rate % What is the APR? (Round your answer to 4 decimal places.) APR % b. If the monthly interest rate is .5%, what monthly annuity payment can the firm offer to the retiring professor? (Round your answer to the nearest cent.) PMT $

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 6MC: You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years....

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