Westonci.ca is the ultimate Q&A platform, offering detailed and reliable answers from a knowledgeable community. Get immediate answers to your questions from a wide network of experienced professionals on our Q&A platform. Connect with a community of professionals ready to help you find accurate solutions to your questions quickly and efficiently.
Sagot :
A 1.03% rate of return is built into the annuity.
- First option
- To receive a single payment today of $4,500,000
- Second option
- To receive an annual payment of $250,000.
- Term is equal to 20 years.
- Let the rate of return be x%.
- A series of payments paid at regular intervals is known as an annuity. Regular savings account deposits, mortgage payments, insurance premiums, and pension payments are all examples of annuities. The periodicity of payment dates allows for the classification of annuities.
- At this rate, the present value of the annuity is $4,500,000.
- The present value of the first option equals the present value of the second option.
- $4,500,000 = $250,000[1/x + 1/x² + … + 1/x^20]
- Upon solving, we get approximately x is 1.03%.
To learn more about annuity, visit :
https://brainly.com/question/23554766
#SPJ9
Thanks for using our service. We aim to provide the most accurate answers for all your queries. Visit us again for more insights. Thanks for using our service. We're always here to provide accurate and up-to-date answers to all your queries. Your questions are important to us at Westonci.ca. Visit again for expert answers and reliable information.
