Return on the annuity, Finance Basics

Assignment Help:

An insurance company offers you and end of year annuity of $48,000 per year for the next 20 years. They claim your return on the annuity is 9%. What is the most you would be willing to pay today for this annuity? 

a

Amount offered every year by

   
 

insurance company

   

 mce_markernbsp;                     48,000.00

b

Period (Years)

   

20

c

Interest rate claimed

 

9%

d

Present Value of the annuity

   
 

of 20 years

   

$438,170.19

           
 

Note: Assumed amount received at the end of the year.


 


Related Discussions:- Return on the annuity

Throughput accounting, state a case where throughput according system is re...

state a case where throughput according system is required

Define new issue market, Define New Issue Market New Issue Market OR P...

Define New Issue Market New Issue Market OR Primary Market New issue market is the segment in which new issues are made.

Stock exchange market, Stock Exchange Market The Idea and improvemen...

Stock Exchange Market The Idea and improvement of a Stock Exchange Stock exchange also identified as stock markets are special "market places" whereas already held bond

Financial Institution Regulations, Why are financial institutions heavily r...

Why are financial institutions heavily regulated, with specific focus on their ability to increase or reduce the money supply?

Cost of financial distress, Assume a levered firm has a current value of $6...

Assume a levered firm has a current value of $650,000,000. The firm currently has $259,258,527.20 in debt. Without debt, firm value (i.e. VU) would be $580,000,000. Ignore the cost

Jobbers or speculators - stock market, Jobbers or Speculators - Stock Marke...

Jobbers or Speculators - Stock Market 1. This is a dealer who that trades in securities in his own right like a principal. 2. He can set prices and make active the market w

Shareholders - measuring business performance, Shareholders - Measuring Bus...

Shareholders - Measuring Business Performance Shareholders Actual owners are interested in the company's both short and long term survival.  For this cause they will need

Measuring business performance, Measuring Business Performance Defini...

Measuring Business Performance Definition Financial analysis is a process via that finance identifies the company's financial performances with comparing the entities in

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd