Kay Mart has purchased an annuity to begin payment at the end of 2013 (the date of

Question:

Kay Mart has purchased an annuity to begin payment at the end of 2013 (the date of the first payment). Assume it is now the beginning of 2011.

The annuity is for $12,000 per year and is designed to last eight years. If the discount rate for the calculation is 11 percent, what is the most she should have paid for the annuity?

Annuity
An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,... Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...