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The Maybe Pay Life Insurance Co. is trying to sell you an investment policy that will...

The Maybe Pay Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $ 25,000 per year forever. If the required return on this investment is 8 percent, how much will you pay for the policy?

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Expert Solution

Ans $ 312500

Amount Payable for the policy = Amount Receivable / Interest Rate

= 25000 / 8%

= 312500

jeff jeffy answered 2 years ago
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