An insurance company offers a retirement annuity that pays $100,000 per year for 15 years, growing...

An insurance company offers a retirement annuity that pays $100,000 per year for 15 years, growing at an “inflation-compensator” rate of 3%, and sells for $806,070. What is the interest rate? Show your work.

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TO CALCULATE INTEREST RATE, WE HAVE TO USE TRIAL & ERROR METHOD. OUR PURPOSE IS THAT OUR ANSWER SHOULD BE AROUND 8.0607, ONE VALUE SHOULD BE HIGHER THAN THIS ONE AND ANOTHER ONE SHOULD BE LOWER THAN THIS, THEN WE CAN USE THE FORMULA TO SOLVE IT

jeff jeffy answered 1 year ago

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