Question
In: Finance
C. D. Rom has just given an insurance company $33,500. Inreturn, he will receive an...
C. D. Rom has just given an insurance company $33,500. In
return, he will receive an annuity of $4,000 for 20
years.
At what rate of return must the insurance company invest this
$33,500 in order to make the annual payments? Use Appendix D for an
approximate answer, but calculate your final answer using the
financial calculator method. (Do not round intermediate
calculations. Round your final answer to 2 decimal places.)
Rate of return _______%
Solutions
Expert Solution
Present Value (PV)= $33,500
Annuity= $4,000
Time period= 20 years
This is calculated by using a financial calculator by inputting the below:
PV= -$33,500; PMT=4,000; N=20
Press CPT and I/Y to compute the rate of return.
The rate of return is 10.24%.
jeff jeffy answered 2 years agoRelated Solutions
C. D. Rom has just given an insurance company $32,500. In return, he will receive an...
C. D. Rom has just given an insurance company $32,500. In
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At what rate of return must the insurance company invest this
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C. D. Rom has just given an insurance company $44,500. In return, he will receive an...
C. D. Rom has just given an insurance company $44,500. In
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At what rate of return must the insurance company invest this
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approximate answer, but calculate your final answer using the
financial calculator method. (Do not round intermediate
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