2. You just paid $750,000 for a perpetuity that will pay you and your heirs $42,000 a year forever. What rate of return are you earning on this policy?
Rate of return=annual cash flows/present value of perpetuity
=42000/750,000
Which is equal to
=5.6%
2. You just paid $750,000 for a perpetuity that will pay you and your heirs $42,000...
You just paid $347,000 for a perpetuity that will pay you and your heirs $11,100 a year forever, with the first payment occuring a year from today. What is the rate of return (interest rate) on this policy? Multiple Choice o 3.35 percent o 3.54 percent o 3.20 percent o 2.95 percent 2.95 percent o 3.26 percent
You just paid $750,000 for an annuity that will pay you and your heirs $45,000 a year forever. What rate of return are you earning on this policy?
You are willing to pay $30,000 now to purchase a perpetuity that will pay you and your heirs $1,200 each year, forever, starting at the end of this year. If your required rate of return does not change, how much would you be willing to pay if this were a 30-year annual payment, ordinary annuity instead of perpetuity?
Problem 6-10 Calculating Perpetuity Values [LO1] The Maybe Pay Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $26,000 per year forever. If the required return on this investment is 5.3 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.)
your grandparents would like to establish a trust fund that will pay you and your heirs 145000 per year forever with the first payment one year from today. if the trust fund earns an annual return of 2.8 percent how much must your grandparents deposit today
2) The Maybe Pay Life Insurance company is trying to sell you an investment policy that will pay you and your heirs $40,000 per year forever. If the required rate of return for this investment Is 5.1% , how much will you pay for the policy?
10A) The Maybe Pay Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $30233 per year forever. If the required return on this investment is 8 percent, how much will you pay for the policy? 10B) The Maybe Pay Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $27437 per year forever. Suppose a sales associate told you the policy costs $501647....
Your grandparents would like to establish a trust fund that will pay you and your heirs $170,000 per year forever with the first payment one year from today. If the trust fund earns an annual return of 3.3 percent, how much must your grandparents deposit today? Multiple Choice O $5,887,445.89 54292,929.29 C) $4755,244.76 54,507,575.76
You have just won the lottery. You and your heirs will receive $25,000 per year forever beginning three years from now. What is the present value of this lottery given an 8% discount rate? O $245,436 ( $253,776 $267,918 $276,765 $288,911
Your grandparents would like to establish a trust fund that will pay you and your heirs $160,000 per year forever with the first payment one year from today. If the trust fund earns an annual return of 3.1 percent, how much must your grandparents deposit today?