Question
In: Finance
Curly’s Life Insurance Co. is trying to sell you an investment policy that will pay you...
Curly’s
Life Insurance Co. is trying to sell you an investment policy that
will pay you and your heirs $39,000 per year forever. Assume the
required return on this investment is 6.4 percent.
How much
will you pay for the policy?
(Do not round intermediate calculations and round your
answer to 2 decimal places, e.g.,
32.16.)
Policy
value today
$
Solutions
Expert Solution
Present value=Annual cash inflows/interest rate
which is equal to
=39000/0.064
which is equal to
=$609375.
jeff jeffy answered 2 years agoRelated Solutions
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