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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 ago
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