Question
In: Finance
Boyer Slick, your insurance agent, proposed to you an annuity contract offered by his firm. It...
Boyer Slick, your insurance agent, proposed to you an annuity
contract offered by his firm. It requires an investment of $20,000
and will pay $2,500 per year for the next 20 years. You believe an
appropriate required rate of return on an investment of this risk
class is 8.5%.
a. Evaluate this investment using the present value approach and
recommend its acceptance or rejection.
b. Now evaluate this investment using the rate of return approach
and make the appropriate recommendation based on your finding.
Solutions
jeff jeffy answered 2 years agoRelated Solutions
An insurance agent called your folks and offered them an opportunity to purchase an annuity for...
An insurance agent called your folks and offered them
an opportunity to purchase an annuity for $8,531.03 that will pay
them $1,000 per year for 20 years. What would they be making on
there investment of $8,531. What tate of return would they
earn?
The annual rate of return your folks would earn on their investment
is __%.
(round to two decimal places)
Your insurance agent is trying to sell you an annuity that costs $45,000 today. By buying...
Your insurance agent is trying to sell you an annuity that costs
$45,000 today. By buying this annuity, your agent promises that you
will receive payments of $380 per month for 15 years. What is the
rate of return expressed as an APR on this investment?
(a) 6.87%
(b) 5.01%
(c) 5.76%
(d) 6.01%
(e) 5.55%
Your insurance agent is trying to sell you an annuity that costs $60,000 today. By buying...
Your insurance agent is trying to sell you an annuity that costs
$60,000 today. By buying this annuity, your agent promises that you
will receive payments of $315 per month for 30 years. What is the
rate of return expressed as an APR on this investment? Multiple
Choice 4.44% 4.81% 4.00% 5.49% 4.72%
Your insurance agent is trying to sell you an annuity that costs $60,000 today. By buying...
Your insurance agent is trying to sell you an annuity that costs
$60,000 today. By buying this annuity, your agent promises that you
will receive payments of $475 per month for 15 years. What is the
rate of return expressed as an APR on this investment?
An insurance agent is trying to sell you an annuity, that will provide you with $6...
An insurance agent is trying to sell you an annuity, that will
provide you with
$6 comma 5006,500
at the end of each year for the next
1515
years. If you don't purchase this annuity, you can invest your
money and earn a return of
77%.
What is the most you would pay for this annuity right now?
Ignoring taxes, the most you would pay for this annuity is
$nothing .
An insurance agent is trying to sell you an annuity, that will provide you with $6,500...
An insurance agent is trying to sell you an annuity, that will
provide you with $6,500 at the end of each year for the next 15
years. If you don't purchase this annuity, you can invest your
money and earn a return of 7%. What is the most you would pay for
this annuity right now?
And insurance agent is trying to sell you an immediate retirement annuity, which for a single...
And
insurance agent is trying to sell you an immediate retirement
annuity, which for a single amount paid today will provide you with
$8000 at the end of each year for the next 15 years, you currently
earning 9% on low risk investments comparable to the retirement
annuity ignore taxes what is the most you would pay for this
annuity?
An insurance agent is trying to sell you an immediate-retirement annuity, which for a single amount...
An insurance agent is trying to sell you an immediate-retirement
annuity, which for a single amount paid today will provide you with
R12 000 at the end of each year for the next 25 years. You
currently earn 9% on low-risk investments comparable to the
retirement annuity. Calculate the most you would pay today.
1. R103 476.97
2. R108 629.85
3. R113 181.83
4. R117 870.96
An insurance agent is trying to sell you an annuity, that will provide you with $19,800 at the end of each year for the next 30 years.
Value of a retirement annuity Personal Finance
Problem An insurance agent is trying to sell you an annuity, that will
provide you with $19,800 at the end of each year for the next
30 years. If you don't purchase this annuity, you can invest your
money and earn a return of 7%.What is the most you would pay for this annuity right now?Ignoring taxes, the most you would pay for this annuity is $______. (Round to the nearest cent.)
Chapman Life Insurance Company is selling a perpetual annuity contract that pays $1000 monthly. The contract...
Chapman Life Insurance Company is selling a perpetual annuity
contract that pays $1000 monthly. The contract currently sells for
25,000. What is the monthly return on this investment miracle
(Hint: what is the periodic interest rate)? What is the APR?
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