Assume that you own an annuity that will pay you $15,000 per year for 13 years,...

Assume that you own an annuity that will pay you $15,000 per year for 13 years, with the first payment being made today. You need money today to start a new business, and your uncle offers to give you $120,000 for the annuity. If you sell it, what rate of return would your uncle earn on his investment?

a. 8.25%

b. 9.45%

c. 10.97%

d. 7.78%

e. 11.07%

Expert Solution

jeff jeffy answered 10 months ago

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