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Live Forever Life Insurance Co. is selling a perpetuity contract that pays $1625 monthly. The contract...

Live Forever Life Insurance Co. is selling a perpetuity contract that pays $1625 monthly. The contract currently sells for $141036. What is the monthly return on this investment vehicle? (Enter answer as a percentage, round 2 decimal places)

Solutions

Expert Solution

monthly return on this investment vehicle=monthly returns/current sales price

=(1625/141036)

which is equal to

=1.15%(Approx).

jeff jeffy answered 2 years ago
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